• Source:JND
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After the Reserve Bank of India (RBI) recently decided to lower the repo rate from 6.25% to 6.00%, a number of public sector banks, including Canara Bank and Indian Bank, have announced reductions in their lending rates in an effort to make credit more affordable. The RBI's monetary easing policy, which encourages borrowing and investment, includes the rate cut.

Canara Bank Lowers RLLR by 25 Basis Points

With effect from April 12, 2025, Canara Bank has lowered its Repo Linked Lending Rate (RLLR) by 25 basis points. The interest rates for its well-liked retail loan products have been drastically reduced as a result of this revision. The annual starting rate for home loans is currently 7.90%, while the annual starting rate for auto loans is 8.20%.

The bank stated that the minimum rate of interest for all loans has been lowered with the RLLR reduction." "This improves affordability for those wishing to purchase a home or car by lowering EMIs for both new and existing borrowers.

Indian Bank Reduces Lending Rates

Additionally, Indian Bank has changed its retail lending rates, lowering the interest rates on home loans from 8.15% to 7.90% annually and the rates on auto loans from 8.50% to 8.25% annually. To encourage new borrowers, the bank is providing alluring incentives, such as reduced processing fees and no documentation charges, in addition to the rate reductions.

Other Banks

With effect from April 15, 2025, the State Bank of India (SBI), the country's biggest public sector lender, has changed its External Benchmark Lending Rate (EBLR) from 8.90% to 8.65%. Similar changes have been made to Punjab National Bank's RLLR, which has decreased from 8.90% to 8.65%. The effective lending rate has decreased from 9.10% to 8.85% as both banks have maintained their current Bank Spread (BSP) of 0.20%.

In keeping with the RBI's 25 basis point repo rate cut, Bank of India also updated its Retail Benchmark Lending Rate (RBLR). The bank reduced its RBLR from 9.1% to 8.85% as of April 9, 2025.

The Effects of Repo Rate

These rate cuts are a result of the RBI's October 2019 circular, which mandates that banks tie their retail loans to an external benchmark, most frequently the repo rate. The External Benchmark Lending Rate (EBLR) or Repo Linked Lending Rate (RLLR) is a benchmark-based system that guarantees borrowers receive monetary policy decisions more quickly.