PNB, BoB, other banks cut lending rates after RBI’s surprise 50 bps repo slash
New Delhi: A host of public sector banks — Punjab National Bank (PNB), Bank of Baroda, UCO Bank, and Bank of India — along with private lender Karur Vysya Bank, have cut lending rates following the Reserve Bank of India’s unexpected 50 basis point (bps) repo rate reduction last week, according to a Business Standard report.
The Monetary Policy Committee (MPC) surprised markets by slashing the repo rate to 5.5%, against forecasts of a smaller 25 bps cut. This marks the third cut in 2025, taking the cumulative reduction to 100 bps so far this year.
Repo-linked rate revisions:
PNB revised its repo-linked lending rate (RLLR) from 8.85% to 8.35%, effective 9 June, but left its MCLR unchanged.
Bank of Baroda lowered its RLLR by 50 bps to 8.15%, effective 7 June.
Bank of India brought down its Repo-Based Lending Rate (RBLR) to 8.35%, with effect from 6 June.
UCO Bank slashes both repo and MCLR rates:
UCO Bank implemented a 10 bps cut across all MCLR tenures from 10 June, alongside a 50 bps reduction in its repo-linked rate to 8.30%, effective 9 June.
New MCLR structure:
Overnight: 8.15%
1-month: 8.35%
3-month: 8.50%
6-month: 8.80%
1-year: 9.00%
Karur Vysya Bank, a private sector lender, cut its 1-year MCLR by 20 bps to 9.80%, and 6-month MCLR by 10 bps. Other maturities remain unchanged. These took effect on 7 June.
RBI moves to quicken rate transmission:
The central bank also trimmed the Cash Reserve Ratio (CRR) by 100 bps in phases, bringing it to 3% of net demand and time liabilities — a level seen only during abnormal economic conditions. This move aims to boost liquidity and accelerate the pass-through of policy rate changes to borrowers and savers.
In a key signal, the RBI also shifted its stance from “accommodative” to “neutral”, hinting that the space for further rate cuts may be limited unless the macroeconomic environment shifts again.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
Support objective journalism for a small contribution.
