The Reserve Bank of India (RBI) on Wednesday reduced the repo rate by 25 basis points, bringing it down to 6% from 6.25% earlier. Following this announcement, several leading public sector banks, including Indian Bank, Punjab National Bank (PNB), and Bank of India, have adjusted their repo-linked benchmark lending rates (RBLR) accordingly. This change affects all repo-linked loan products, including home loans, personal loans, and more.
What is RLLR?
Repo-linked lending rate (RLLR) is the interest rate at which banks extend loans to customers, based on the repo rate set by RBI. The term “repo-linked lending rate” refers to an interest rate that is linked to the repo rate. An RBI circular issued in October 2019 mandates that banks link their retail loans to external benchmark lending rates, known as E-BLR. Consequently, the repo rate has become the benchmark for most banks.
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If a customer chooses an RLLR-linked home loan, his/her interest rates will fluctuate in accordance with changes in the repo rate. Most home loan borrowers opt for a floating rate home loan, and hence, their loans are linked to RLLR.
The impact of the reduction of RLLR will vary between old and new home loan borrowers. Most of these banks have promptly passed on the reduction benefit to new borrowers. However, existing borrowers will benefit according to their respective interest rate reset cycles.
Indian Bank
Indian Bank has revised its lending rates following RBI’s 25 basis points reduction in the repo rate. The bank has lowered its repo benchmark rate from 6.25% to 6%; consequently, the repo-linked benchmark lending rate (RBLR) has been reduced from 9.05% to 8.7%. As per the bank’s BSE filing, these revised rates will take effect on April 11, 2025, and will be applicable to all repo-linked loans until the subsequent review.
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As per Indian Bank’s BSE filing on April 9, 2025, “In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we have to inform you that, in line with the decrease in REPO rate of 25 bps by the Monetary Policy Committee (MPC) of RBI, the bank has revised the REPO Benchmark Rate and Repo Linked Benchmark Lending Rates (RBLR). The revised rate as detailed below is effective from 11.04.2025 until the next review.”
Punjab National Bank
Punjab National Bank has revised its repo-linked lending rate (RLLR) in response to the RBI’s repo rate cut. The RLLR has been reduced from 9.1% to 8.85%, which includes a basic spread (BSP) of 20 basis points. The revised rate is effective from April 10, 2025. Notably, there are no changes to the bank’s existing marginal cost of funds-based lending rate (MCLR) and base rate.
As per PNB’s BSE filing, “The exchange is hereby informed that the bank (Punjab National Bank) has revised RLLR from 9.10% (including BSP of 20 bps) to 8.85% (including BSP of 20 bps) with effect from 10.04.2025. Further, there is no change in the existing MCLR and base rate.”
Bank of India
Bank of India has also reduced its lending rates in line with RBI’s 25 basis points repo rate cut. The bank has brought down its repo-linked benchmark lending rate (RBLR) from 9.1% to 8.85%, with the revised rate effective from April 9, 2025.
According to Bank of India’s BSE filing, “Effective RBLR from 9.1% to 8.85%, a decrease of 25 bps. The new rates are effective from April 9, 2025.”
