The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points during its Monetary Policy Committee (MPC) meeting held on February 7, 2025 bringing it down to 6.25% after keeping it unchanged for almost two years. Following the central bank, many banks such as Canara Bank, PNB, Union Bank of India and Bank of Baroda also cut their repo linked lending rate by 0.25%. Home loan borrowers of these banks will have a choice of either reducing their EMIs while keeping the tenure unchanged or reducing their remaining tenure while keeping the EMI amount unchanged.
What is RLLR?
Repo Linked Lending Rate (RLLR) is the interest rate at which banks lend money to customers, based on the repo rate set by the Reserve Bank of India (RBI). Repo linked lending rate is the term used when this interest rate is linked to the repo rate. An RBI circular from October 2019 mandates that banks link their retail loans to external benchmark lending rates, or E-BLR. Consequently, the repo rate has become the benchmark for the majority of banks.
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.
Also read: HDFC Bank increases lending rate by 5 bps on this tenure; check details
The impact of the reduction of RLLR will be different on old and new home loan borrowers. Most of these banks have passed on the reduction benefit to new borrowers immediately. However, their old borrowers will get the benefit as per their corresponding interest rate reset cycle.
Canara Bank
Canara bank has revised Repo Linked Lending Rate (RLLR) to 9.00% from 9.25%. Note that this rate will be applicable only to new accounts opened on or after 12.02.2025 and accounts completing 3 years under RLLR regime on or after 12.02.2025 (from the date of grant of loan/Advance), as per the Canara Bank’s website.
Bank of Baroda
Rate of interest on various loans linked with Baroda repo linked lending rate (BRLLR).
As per the bank website, “For Retail Loans applicable BRLLR is 8.90% w.e.f. 10.02.2025 (Current RBI Repo Rate: 6.25% + MarkUp/Base Spread 2.65%)”
Bank of India
Bank’s repo based lending rate has been reduced from 9.35% to 9.10% effective February 7, 2025.
Union Bank of India
Union Bank of India EBLR (Repo Rate) has cut the repo rate to 9% from 9.25% effective February 11, 2025.
Indian Overseas Bank
Indian Overseas Bank (IOB) has reduced its Repo Linked Lending Rate (RLLR) by 25 bps, bringing it down from 9.35% to 9.10%. The revised RLLR will be effective from February 11, 2025.
Punjab National bank
PNB has reduced the Repo Linked Lending Rate (RLLR) from 9.25% to 9% effective from February 10, 2025.
These announcements came after the Reserve Bank of India cut the repo rates by 25 basis points (bps) from 6.50% to 6.25%.
This table summarizes the latest Repo Linked Lending Rate (RLLR) and lending rate changes by major banks after the Reserve Bank of India cut the repo rate to 6.25%:
| Bank | Previous RLLR/Repo-Based Rate | Revised RLLR/Repo-Based Rate | Effective Date |
| Canara Bank | 9.25% | 9.00% | 12-Feb-25 |
| Bank of Baroda | Not mentioned | 8.90% (BRLLR) | 10-Feb-25 |
| Bank of India | 9.35% | 9.10% | 7-Feb-25 |
| Union Bank of India | 9.25% | 9.00% | 11-Feb-25 |
| Punjab National Bank (PNB) | 9.25% | 9.00% | 10-Feb-25 |
| Indian Overseas Bank | 9.35% | 9.10% | 11-Feb-25 |
Source: Bank websites as on February 12, 2025 Source Link
