RBI Slashes Repo Rate by 25 bps: Indian Bank, PNB, Bank of India Slashes RLLR Rates; Home Loans Get Cheaper

The Reserve Bank of India (RBI) on April 9 slashed the interest rates by 25 basis points, bringing it down to 6% from 6.25% earlier. Following the announcement, leading public sector banks, including Indian Bank, Punjab National Bank (PNB), and Bank of India (BOI), adjusted their repo-linked benchmark lending rates (RBLR) accordingly. The measure could lower the interest rates of various financial products including home loans, personal loans, and more.

What is RRLR?

Repo-linked lending rate (RLLR) is the interest rate at which banks give loans to the customers, which is based on the repo rate set by the RBI. The term “repo-linked lending rate” refers to an interest rate that is linked to the repo rate. The central bank on October 19 issued a circular that mandates banks to link their retail loans to external benchmark lending rates, known as E-BLR.

If a borrower opts for an RLLR-linked home loan, his /her interest rates will fluctuate in accordance with changes in the repo rate. Most customers choose home loans based on floating rate and hence their loans are linked to RLLR.

Let’s have a look at banks who have passed on the rate cut benefits to the customers

1. Indian Bank

Following RBI’s 25 bps rate cut, Indian Bank has revised its lending rates. The bank has slashed its repo benchmark rate from 6.25% to 6%. The repo-linked benchmark lending rate (RBLR) has also been reduced from 9.05% to 8.7%. Notably, these revised rates will come into effect from April 11, 2025, and will be applicable to all repo-linked loans until the subsequent review.

As per Indian Bank’s BSE filing on April 9, 2025, “In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we have to inform you that, in line with the decrease in REPO rate of 25 bps by the Monetary Policy Committee (MPC) of RBI, the bank has revised the REPO Benchmark Rate and Repo Linked Benchmark Lending Rates (RBLR). The revised rate as detailed below is effective from 11.04.2025 until the next review.”

2. Punjab National Bank

In response to RBI’s repo rate cut, Punjab National Bank slashed its repo-linked lending rate (RLLR). The RRLR has been slashed from 9.1% to 8.85%, which includes a bank spread (BSP) of 20 basis points. The revised rate will come into effect from April 10, 2025.

As per PNB’s BSE filing, “The exchange is hereby informed that the bank (Punjab National Bank) has revised RLLR from 9.10% (including BSP of 20 bps) to 8.85% (including BSP of 20 bps) with effect from 10.04.2025. Further, there is no change in the existing MCLR and base rate.”

3. Bank of India

In accordance with RBI’s 25 basis points repo rate cut, the Bank of India slashed its lending rates. 9.1% to 8.85%, with the revised rate effective from April 9, 2025.

According to Bank of India’s BSE filing, “Effective RBLR from 9.1% to 8.85%, a decrease of 25 bps. The new rates are effective from April 9, 2025.”