After a recent reduction of the repo rate of 25 basis points, effective from April 9, 2025, a spontaneous wave of interest rate cuts in the banking sector has come about, thereby granting some relief to borrowers.
Two big banks (Indian Bank and Punjab National Bank) have hurried to benefit their customers by lowering their repo-linked lending rate. So, if you had been waiting for low EMIs or were planning to take a home loan, personal loan, or business loan, it is the right time.
Which Banks Have Reduced Their Lending Rates?
1. Indian Bank Cuts Rates
The Chennai-based Indian Bank has altered its Repo Benchmark Rate way down, from 6.25% to 6.00%, and has cut off its RBLR from 9.05% to 8.70%.
- Effective Date: April 11, 2025
- Benefit to Borrowers: Interest outstanding on RBLR-linked loans will fall.
- Logic: The bank has made this amendment because of the monetary policy easing by the RBI.
Such reduction stands for the current duration till the next review, immediately offering relief to customers who qualify.
2. Punjab National Bank (PNB) Cuts RLLR Rates
This indicative slashing of the RLLR will now be complemented by a similar lowering of PNB’s RLLR from 9.10% to 8.85%.
- Effective Date: April 10, 2025
- Worth Knowing: MCLR and Base Rate are retained unchanged, as stated by PNB.
Who Wins? Everybody with a loan connected to the RLLR will benefit from the lowered rates.
Shall other banks join the bandwagon of rate cuts?
Financial experts expect other large banks to announce similar cuts in the weeks ahead. Historically speaking, most lenders have really given repo rate cuts by the RBI to borrowers with the idea of enforcing cheaper loans.
What It Means for the Borrowers
- Low EMIs on existing loans connected to repo or lending rates are benefiting.
- New borrowers will be enjoying low borrowing rates for home loans, car loans, and personal loans.
- This will lead to more growth in credit as an encouragement for spending and investments.
What Lies Ahead
According to some hints from the RBI, rate cuts may follow suit. In so doing, a further fall in borrowing costs would make it apt for individuals and businesses to take out loans.
Does Your Bank Find A Mention Here?
Get your bank account details checked for lending rate adjustments if your loan type comes under repo-based rates (RBLR/RLLR). If not, hold on, as more announcements may come earlier.
Final Thoughts
RBI’s present rate cut has created a platform for Indian Bank and PNB to undertake rate cuts, and if you are someone who has held off a loan, this is the time. Wait and see what other banks will offer next- you could be a winner!