Four banks have reduced the interest rate, now EMI will be reduced; customers will get many more benefits
After the reduction in repo rate by RBI, major banks like Bank of Baroda, HDFC Bank, Punjab National Bank and UCO Bank have reduced their interest rates by up to 50 basis points. This reduction will reduce the EMI of home auto and personal loans. Bank of Baroda has reduced the loan linked to repo rate by 50 basis points.
They have also begun passing the benefit of the cut in repo rate by the RBI to the consumers. Four public as well as private sector banks have now reduced their interest rates up to 50 basis points. With the reduction in their interest rates, the way has now been opened to decrease the monthly installment (EMI) of several loans, such as house, automobile, and personal.
State-owned Bank of Baroda (BOB) has reduced its interest rate on loans with respect to the repo rate by 50 basis points. The bank now has a repo-based lending rate (RRLR) of 8.15%. The bank has provided its customers the entire benefit of the cut in the repo rate by the RBI.
Meanwhile, the private-sector HDFC Bank reduced the Marginal Cost of Fund-Based Lending Rate (MCLR) by 10 basis points. With the reduction, the interest rate of the bank on a one-month loan has reduced to 8.90%. On the same lines, the three-month loan interest has reduced to 8.95% while the six-month and one-year loans have reduced to 9.05%. The two and three-year loan interest has reduced from 9.20% to 9.10%.
The reduction in interest rates of the Bank of Baroda and the HDFC Bank has become effective from June 7. According to IANS, public sector Punjab National Bank (PNB) has cut the interest rates on its repo-based loan by 50 basis points. After this reduction, the RRLR of banks has come down from 8.85% to 8.35%.
However, the bank has kept its base rate and marginal cost of lending rate (MCLR) unchanged. UCO Bank has adopted a different path and has reduced the MCLR by 10 basis points on all tenure loans. After this reduction, UCO Bank's one-month MCLR has come down to 8.35%, three-month loan to 8.5%, six-month and one-year loan interest rates have come down to 8.8% and 9%.
The reduction in interest rates of PNB, Bank of India, and UCO Bank will be effective from June 10. Earlier, the Bank of India had reduced the RRLR by 50 basis points from 8.85% to 8.35%.
RBI had reduced the repo rate by 50 basis points last week. After this reduction, the repo rate has come down to 5.50%. So far in 2025, the RBI has cut the repo rate by 100 basis points or 1% three times.
In the last meeting, the RBI announced a cut of 100 basis points or 1% in the cash reserve ratio (CRR). This move will increase the availability of cash with banks. The repo rate is the rate at which the RBI lends to commercial banks.
