Following the Reserve Bank of India's (RBI) policy decision to cut the repo rate by 50 basis points (bps) on Friday, various state-owned banks have also reduced their external benchmark-linked lending rates.
Bank of Baroda (BoB) was among the first to announce a rate cut. The lender reduced its Baroda Repo Linked Lending Rate (BRLLR) by 50 bps, effective from June 7, bringing it down to 8.15% from 8.65%. The bank maintained its mark-up of 2.65%, indicating a full transmission of the RBI’s rate cut. The revised BRLLR will benefit both new and existing borrowers, especially in the home loan and SME segments.
HDFC Bank has reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 bps across tenors, benefiting borrowers whose loans are linked to MCLR. The new MCLR rate will apply from June 7, 2025. With this rate cut, HDFC Bank is now charging 8.9% interest on overnight and one-month rates. The bank's three-month rate has dropped to 8.95%, while the six-month and one-year rate is 9.05% now. For repo-rate-linked loans, HDFC Bank is expected to reduce rates by 50 bps and pass on the benefits to customers from next month.
The Punjab National Bank (PNB) has revised its repo-linked lending rate (RLLR) to 8.35%, with effect from June 9. Earlier, the RLLR stood at 8.85%. However, its marginal cost of funds-based lending rate (MCLR) remains unchanged.
Bank of India also revised the repo-based lending rate by 50 bps to 8.35%, applicable from June 6.
UCO Bank has reduced RRLR by 50 bps to 8.3% with effect from June 9. It also announced a reduction in its MCLR across all tenors, with the revised rates set to take effect from June 10, 2025. It has reduced the one-month MCLR to 8.35% and the overnight lending rate to 8.15%. The state-owned lender has also cut three-month MCLR to 8.5% and six-month MCLR to 8.8%. The bank has reduced one-year MCLR to 9%.
In its 55th Monetary Policy Meeting (MPC), the central bank has reduced the benchmark repo rate to 5.5% from 6%. It was the third rate cut by the banking regulator to support domestic growth amid global headwinds and easing retail inflation.
