Hours after the Reserve Bank of India (RBI) announced a 25 basis point cut in the repo rate, two major public sector banks — Bank of India and UCO Bank — on Wednesday reduced their lending rates, bringing relief to both existing and new borrowers.
The RBI’s Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, lowered the key policy rate from 6.25 per cent to 6 per cent earlier in the day.
This marks the second consecutive rate cut under Malhotra’s leadership and is aimed at supporting economic growth amid rising global challenges, including a steep 26 per cent tariff imposed by the US on Indian exports.
Responding swiftly to the RBI’s move, Bank of India reduced its Repo-Based Lending Rate (RBLR) to 8.85 per cent, down from 9.10 per cent. The new rate came into effect immediately on April 9.
Similarly, UCO Bank also cut its repo-linked lending rate to 8.8 per cent, with the revised rate becoming effective from Thursday.
Both banks announced the rate cuts through separate regulatory filings, citing the RBI’s latest policy decision as the reason for the revision.
The move is expected to make loans cheaper, encouraging increased borrowing by both individuals and businesses. Experts noted that other banks are likely to follow suit in the coming days, passing on the benefits of the RBI’s rate cut to customers across the country.
While announcing the decision, Governor Malhotra also revealed a shift in the RBI’s policy stance from ‘neutral’ to ‘accommodative,’ indicating the central bank’s willingness to support growth through a more relaxed monetary policy.
“Our stance provides policy rate guidance without any direct guidance on liquidity management,” he said.
The RBI has already infused over $80 billion into the banking system in the past two months, along with a rate cut in February — the first such move in five years.
-IANS
