Rate cut ripple effect: BoB, Bank of India first to slash repo-linked loan rates

Bank of India said in a regulatory statement that its Repo Based Lending Rate (RBLR) has been brought down from 8.35% to 8.10%, effective immediately. Bank of Baroda, in a separate disclosure, confirmed that its Baroda Repo Linked Lending Rate (BRLLR) will drop from 8.15% to 7.90%, starting December 6.

Earlier this week, Indian Bank, another state-run lender, also lowered its one-year Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points to 8.80%, effective December 3.

The RBI, for the first time in six months, reduced the benchmark repo rate by 25 basis points to 5.25%. All six members of the Monetary Policy Committee, chaired by Governor Sanjay Malhotra, voted in favour of the cut.

The RBI also reiterated its commitment to providing adequate liquidity to the banking system as it announced intent to conduct open market purchases of government bonds up to Rs 1 lakh crore in two tranches of Rs 50,000 crore each on 11th and 18th December and a buy-sell swap of USD 5 billion on 16th December.

Both measures will add durable liquidity at a time when banks face seasonal liquidity pressures.

This is the fourth rate cut by the central bank since February 2025, taking the total to 125 basis points. It held rates in August and October bimonthly monetary policy meetings.