How RBI's Rate Cut Will Slash Your Loan EMIs: SBI, HDFC, PNB and More Follow Suit

The Reserve Bank of India (RBI) slashed its key interest rate by 25 basis points for the second consecutive time last week. The reduction, aimed at countering the threat of reciprocal tariffs from the US, has prompted multiple major banks to lower their lending rates.

Leading Banks Announce Rate Cuts

HDFC Bank was quick to respond, becoming the first to trim its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 basis points on April 7. This move was followed by several others. State Bank of India (SBI) led the way with a 25-basis-point cut in its Repo Linked Lending Rate (RLLR), reducing it to 8.25%. Similarly, Punjab National Bank (PNB) also followed suit, announcing a 25-basis-point cut in its RLLR to 8.85%.

Indian Bank made adjustments to its Repo Benchmark Rate, cutting it from 6.25% to 6.00%, while its Repo Linked Benchmark Lending Rates fell from 9.05% to 8.70%. Bank of Baroda and Bank of Maharashtra also slashed their lending rates by 25 basis points this month, marking a significant shift in the banking ecosystem.

Read This Also: RBI MPC Rate Cut: Cheaper Auto Loans?

Impact on Borrowers and Depositors
The rate cuts are expected to have an immediate impact on borrowers, especially those with floating interest rates on loans, as it will reduce their monthly EMI payments. These cuts are in line with the RBI’s stance on lowering the cost of borrowing to support growth. However, with reduced lending rates, depositors may face lower returns on their savings.

The changes in lending rates also reflect how banks are adjusting to the new external benchmark system set by the RBI. The Repo-Linked Lending Rate (RLLR) and the MCLR system provide banks with a more standardized approach to determine interest rates based on the RBI’s policy decisions.

These Banks Have Cut Lending Rates:

State Bank of India
SBI Reduces Repo Linked Lending Rate by 25 Basis Points to 8.25%. SBI cuts its lending rate to make loans more affordable for consumers, bringing down EMIs across various loan types.

HDFC Bank
HDFC Slashes MCLR by 10 Basis Points on Home, Personal, and Vehicle Loans. HDFC Bank trims its MCLR, offering reduced rates on loans, including home and car loans, starting April 7.

Punjab National Bank
PNB Cuts Repo-Linked Lending Rate to 8.85%
PNB announces a reduction in its lending rates, making home and personal loans cheaper for its customers.

Indian Bank
Indian Bank Lowers Repo Benchmark Rate from 6.25% to 6.00%, Indian Bank adjusts its rates, offering lower EMIs for those with repo-linked loans.

Bank of India
Bank of India Slashes Repo-Linked Benchmark Lending Rate to 8.85%. A 25-basis-point rate cut by Bank of India brings relief to borrowers with floating interest rate loans.

Bank of Baroda
Bank of Baroda Cuts External Benchmark Lending Rates for Retail & MSME Loans. Bank of Baroda reduces rates, benefiting both retail customers and MSMEs with lower interest payments.

Bank of Maharashtra
Bank of Maharashtra Reduces Repo-Linked Lending Rate to 8.80%. Bank of Maharashtra announces a rate cut, easing loan repayments for its customers.