State-owned Bank of Baroda (BoB) on Sunday said it has cut its benchmark lending rate linked to repo rate by 50 basis points in line with the RBI’s rate reduction.
Illustration: Uttam Ghosh/Rediff
Meanwhile, private sector HDFC Bank reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 basis points across tenure, which will benefit borrowers whose loans are linked to this benchmark.
Pursuant to the Reserve Bank of India (RBI) reducing the policy repo rate, the bank has slashed its Repo Linked Lending Rate (RLLR) by 50 basis points with effect from June 7, BoB said in a statement.
The bank’s RLLR stands at 8.15 per cent, it said.
With this, BoB has fully effected on the RBI rate cut in its RLLR, it added.
According to HDFC Bank website, the new MCLR rates are effective from June 7. With the reduction, the overnight and one-month rates are down by 10 basis points to 8.90 per cent.
The three-month rate has dropped 10 bps to 8.95 per cent, while the six-month and one-year rate is 9.05 per cent, down 10 bps.
Both the two-year and three-year tenure lending rate have been reduced from earlier 9.20 per cent to 9.10 per cent.
Earlier on Friday, the RBI cut interest rates by a larger-than-expected 50 basis points, and unexpectedly reduced the cash reserve ratio for banks to make available more money to lend in a bid to boost the economy.
The RBI’s six-member monetary policy committee, headed by Governor Sanjay Malhotra and consisting of three external members, voted five to one to lower the benchmark repurchase or repo rate by 50 basis points to 5.5 per cent.
It also cut the cash reserve ratio by 100 basis points to 3 per cent, adding Rs 2.5 lakh crore to already surplus liquidity in the banking system.
With the latest reduction, the RBI has now cut interest rates by a total of 100 basis points in 2025, starting with a quarter-point reduction in February — the first cut since May 2020 — and another similar-sized cut in April.
