The Reserve Bank of India (RBI) recently reduced the repo rate by 0.50%, leading to a ripple effect across India’s banking sector. This key monetary policy move has prompted several prominent banks—both public and private—to slash their loan interest rates, offering much-needed relief to borrowers.

With this revision, customers with existing home, personal, or vehicle loans, as well as those planning new loans, could see their EMIs drop. If you're among them, here’s a detailed look at which banks have reduced rates and how it might impact your finances.

The repo rate is the rate at which RBI lends money to commercial banks. When it’s lowered, borrowing becomes cheaper for banks, and they often pass the benefit to consumers in the form of lower loan interest rates.

This time, the RBI’s 0.50% repo rate cut has encouraged several top banks to recalibrate their lending rates, making loans more affordable.

As the country’s largest public sector bank, SBI is often the first to act following major policy changes. After the repo rate cut:

• Repo-Linked Lending Rate (RLLR) has been reduced to 8.25%

• External Benchmark Lending Rate (EBLR) is now 8.9%

This change took effect from April 15, 2025. Existing borrowers may experience a drop in their EMIs, depending on their loan terms.

PNB, another major government bank, followed suit with interest rate revisions:

• RLLR has been brought down from 8.9% to 8.65%

• Overall lending rates have shifted from 9.1% to 8.85%

These reductions offer PNB customers some breathing room on monthly payments.

Among private sector banks, HDFC Bank has adjusted its Marginal Cost of Funds based Lending Rate (MCLR):

• Home loan rates now range between 8.7% and 9.55%

• The final rate depends on factors like credit score and income profile

This cut is beneficial for both existing and new HDFC borrowers.

IOB has also lowered its loan rates significantly:

• Base lending rate reduced from 9.05% to 8.7%

• RLLR slashed from 9.1% to 8.85%

This change is expected to positively impact retail loan customers of the bank.

Following the trend, Bank of Baroda has also implemented interest rate cuts:

• Loan rates now revised from 9.1% to 8.85%

These reductions demonstrate a broader industry-wide response to the RBI’s policy stance.

While repo-linked cuts influence lending rates, your personal interest rate is still determined by:

• Credit score

• Loan tenure and amount

• Type of loan (home, personal, auto)

• Bank’s internal policies

Hence, even if your bank announces a rate cut, the actual impact on your loan depends on your individual creditworthiness and loan agreement.

If you already have a loan or are planning to take one, this is the right time to:

• Check with your bank about the revised interest rates

• Review your loan statement to see the new EMI if applicable

• Consider refinancing your loan if another lender offers a significantly lower rate

Lower interest rates can translate to huge long-term savings, especially on big-ticket loans like housing or business loans.

The recent repo rate cut by the RBI is already influencing the lending landscape, with top banks adjusting their interest rates downward. This move is expected to provide relief to millions of borrowers across the country. As more banks may follow suit, borrowers should stay updated, review their loan terms, and explore options to maximize savings on interest payments.