RBI Cuts Repo Rate, these Banks have Lowered Home Loan Interest

The Reserve Bank of India (RBI) on Wednesday lowered its main interest rate by 0.25%, bringing it down to 6% from 6.25%. Following this, many major government-owned banks, including Indian Bank, Punjab National Bank (PNB), and Bank of India, have reduced their lending rates, too. This affects all loans tied to the repo rate, such as home loans and personal loans.

What is RLLR?

RLLR stands for Repo-Linked Lending Rate. This is the interest rate that banks charge customers based on the RBI’s repo rate. Since October 2019, RBI rules have required banks to link their retail loans to outside benchmarks (E-BLR), with most banks choosing the repo rate as their benchmark.
If you have an RLLR-linked home loan, your interest rate will change when the repo rate changes. Most home loan borrowers choose floating-rate loans, which means their loans are linked to RLLR.

The effect of lower RLLR will be different for new and existing borrowers. New borrowers will benefit right away. Existing borrowers will see benefits when their interest rates are reset according to their loan terms.

Indian Bank

Indian Bank has cut its lending rates after RBI’s 0.25% reduction in the repo rate. The bank lowered its repo benchmark rate from 6.25% to 6%, which reduced the RLLR from 9.05% to 8.7%. According to the bank’s statement to the stock exchange, these new rates start on April 11, 2025, and will apply to all repo-linked loans until the next review.

As Indian Bank told the stock exchange on April 9, 2025, “Following the decrease in the REPO rate by 0.25% by RBI’s Monetary Policy Committee, the bank has revised its REPO Benchmark Rate and Repo Linked Benchmark Lending Rates. The new rates take effect from April 11, 2025, until the next review.”

Punjab National Bank

Punjab National Bank has also reduced its repo-linked lending rate following RBI’s rate cut. The RLLR has been lowered from 9.1% to 8.85%, which includes a basic spread of 0.2%. The new rate starts on April 10, 2025. The bank is not changing its other lending rates (MCLR and base rate).

PNB’s stock exchange filing stated, “We inform you that the bank has revised RLLR from 9.10% (including 0.2% basic spread) to 8.85% (including 0.2% basic spread) starting April 10, 2025. There is no change in the existing MCLR and base rate.”

Bank of India

Bank of India has also cut its lending rates in line with RBI’s 0.25% repo rate reduction. The bank has reduced its RBLR from 9.1% to 8.85%, with the new rate starting on April 9, 2025.

According to the Bank of India’s filing, “Effective RBLR reduced from 9.1% to 8.85%, a decrease of 0.25%. The new rates start on April 9, 2025.”