New Delhi: Good news for borrowers! After the Reserve Bank of India slashed the repo rate by 50 basis points, several public sector banks—including Punjab National Bank, Bank of India, and UCO Bank—have reduced their lending rates. The move is aimed at boosting economic activity by making loans more affordable for individuals and businesses. PNB was quick to respond, cutting its repo-linked lending rate from 8.85 per cent to 8.35 per cent.
However, the bank has not made any changes to its base rate or marginal cost of lending rate (MCLR). Bank of India also lowered its repo-linked lending rate from 8.85 per cent to 8.35 per cent, as mentioned in its stock exchange filing. Meanwhile, UCO Bank opted for a different approach, reducing its MCLR by 10 basis points across all loan tenures.
Starting June 10, borrowers can expect slightly lower interest rates on loans like home and personal loans. UCO Bank has reduced its overnight MCLR from 8.25 per cent to 8.15, one-month MCLR from 8.45 per cent to 8.35 per cent, and three-month MCLR from 8.6 per cent to 8.5 per cent, making borrowing a bit more affordable.
UCO Bank also brought down its six-month MCLR to 8.8 per cent and one-year MCLR to 9 per cent. Meanwhile, Bank of Baroda joined the trend by cutting its repo-linked lending rates by 50 basis points for select loan tenures, further easing borrowing costs for customers.
These rate cuts follow the RBI’s recent decision, announced by the Monetary Policy Committee headed by Governor Sanjay Malhotra, to reduce the repo rate—the rate at which the RBI lends to commercial banks. The goal is to boost economic activity by making loans cheaper, encouraging more spending and investment.
Along with the repo rate cut, the RBI also lowered the Cash Reserve Ratio (CRR) from 4 per cent to 3 per cent, to be implemented in four phases. This move is expected to release around Rs 2.5 lakh crore into the banking system. Since CRR is the portion of deposits banks are required to keep with the RBI, reducing it means banks will have more funds available to lend, further boosting liquidity and credit flow.
Stay informed on all the , real-time updates, and follow all the important headlines in and on Zee News.