BoB and Bank of India cut repo-linked rates after RBI’s policy rate cut, others would follow suit

Bank of Baroda (BoB) says the Baroda Repo Based Lending Rate (BRLLR) will drop to 7.90% from the existing 8.15%. | Photo credit: ANUSHREE FADNAVIS

The Bank of India lowered the Repo Based Lending Rate (RBLR) to 8.10 percent from 8.35 percent on Friday, the Bank of India said in a filing with the regulator.

The Baroda Repo Based Lending Rate (BRLLR) will drop to 7.90 percent from the existing 8.15 percent, BoB said in a separate filing.

The new rate would come into effect from December 6, it added.

Another state-owned lender, Indian Bank, earlier this week reduced the marginal cost of funds-based lending rate (MCLR) by 5 basis points to 8.80 percent for a tenure of one year, with effect from December 3.

The Reserve Bank of India (RBI) cut its key interest rate for the first time in six months and promised to provide a ₹1 lakh crore liquidity boost to the banking sector to support a ‘Goldilocks’ economy in the face of high US rates.

The six-member Monetary Policy Committee, led by RBI Governor Sanjay Malhotra, unanimously voted to cut the repo rate by 25 basis points to 5.25 percent and maintained a neutral stance, leaving room for further rate cuts.

The move is seen as support to the economy that has been hit hard by US President Donald Trump’s high 50 percent tariff on Indian goods.

RBI’s move will complement the government’s efforts to provide support to the economy in the form of major GST reforms, relaxation of labor rules and easing of financial sector regulations.

A reduction in the repo rate will lead to lower borrowing costs for both individuals and corporates as it will reduce the interest that banks pay to borrow from the RBI. With cheaper financing, banks can reduce interest rates such as MCLR and base rates, making home, car and business loans more affordable.

This reduces EMIs, encourages consumers and businesses to borrow more and supports economic activity.

Published on December 6, 2025