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Bank of Maharashtra (BoM) and Indian Overseas Bank (IOB) have cut their repo-linked lending rates by 25 basis points, following the RBI's recent policy rate reduction aimed at boosting economic growth. BoM's RLLR is now 8.80%, with home loans starting at 7.85% and car loans at 8.20%. IOB's RLLR is down to 8.85%, lowering its base lending rate to 6%. These adjustments are expected to make loans more affordable for customers, especially in semi-urban and rural areas where these banks have strong reach. The move supports cheaper credit access, potentially stimulating consumer spending and the housing market.
Two public sector banks-Bank of Maharashtra (BoM) and Indian Overseas Bank (IOB)-have reduced their lending rates by 25 basis points following the Reserve Bank of India's (RBI) recent policy rate cut. This move is set to make loans more affordable for both new and existing borrowers across retail categories like housing, vehicle, and education. Advertisement
BoM announced that its Repo-Linked Lending Rate (RLLR) has been reduced from 9.05% to 8.80%. As a result, the bank's home loans will now start at 7.85% per annum, while car loans will be available from 8.20%, which the bank claims are among the lowest in the industry.
The RBI's decision to lower the repo rate by 25 basis points earlier this month was aimed at supporting economic growth, which is under pressure due to ongoing global trade tensions-particularly the reciprocal tariffs between the US and China. This is the second consecutive policy cut by the central bank in recent months.
BoM said in its statement that the rate cut will enhance financial well-being for its customers, as all retail loans it offers-such as home, education, gold, and personal loans-are directly linked to the RLLR.
Indian Overseas Bank also announced a similar reduction in its lending rates. The bank's RLLR has been brought down from 9.10% to 8.85%, and its benchmark lending rate has dropped from 6.25% to 6%. IOB said the move was in line with the RBI's direction and aims to offer rate benefits directly to customers.
With public sector banks quickly aligning their rates with the RBI's moves, borrowers across India-especially in semi-urban and rural areas where these banks have strong presence-will benefit from reduced EMIs and easier access to credit.
With key banks cutting lending rates after the RBI's policy shift, borrowers now have a chance to access cheaper credit, which could provide a timely boost for both household spending and the housing market.
Source: PTI
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