Bank Of Baroda, PNB, Others Cut Interest Rate After RBI Lowered Repo Rate

(MENAFN- KNN India) New Delhi, Dec 8 (KNN) As many as five banks including Bank of Baroda and Punjab National Bank have so far cut their external benchmark-linked loan rates following Reserve Bank of India's (RBI) decision on December 5 to lower policy repo rate by 25 basis points to 5.25%.

Public sector Bank of Baroda has reduced its Repo Linked Lending Rate by 25 basis points effective December 6, 2025. The Bank's lending rate now stands at 7.90% as against 8.15% earlier.

Punjab National Bank (PNB) has revised Repo Linked Lending Rate from 8.35% to 8.10%.

Marginal Cost of Lending Rate (MCLR) and Base Rate of the PNB remain unchanged, the PNB said in a regulatory filing.

Indian Bank, Bank of India and Karur Vysya Bank have also reduced lending rate by 25 basis points, in line with the repo rate cut by the RBI.

As per the revised rate, Indian Bank's benchmark lending rate now stands at 7.95% while Bank of India has fixed it at 8.10%.

Other banks are also expected to revise their interest rates downward soon.

With retail inflation at record low, the RBI's Monetary Policy Committee on December 5, 2025 decided unanimously to reduce Repo rate by 25 basis points to 5.25%.

With the latest cut, the RBI has cumulatively reduced key lending rate by 125 basis points in the current calendar year.

Industry bodies and corporate houses have welcomed the rate cut decision saying it will give further impetus to economic growth by ensuring that affordable capital is available for companies planning capacity and market expansion.

In its reaction to the RBI's rate cut decision, Federation of Indian Micro and Small & Medium Enterprises (FISME) said that if transmitted promptly by banks to borrowers, the rate cut will be especially beneficial for smaller firms with tight cash flows.

(KNN Bureau)

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