Bank of India, UCO Bank cut lending rates after RBI repo rate slash

IANS April 9, 2025 170 views

The Reserve Bank of India has reduced its key policy rate, leading to immediate lending rate cuts by major public sector banks. Bank of India and UCO Bank swiftly responded by lowering their repo-linked lending rates, making loans more affordable for consumers and businesses. This strategic move aims to stimulate economic growth amid global challenges. The RBI's shift to an 'accommodative' stance signals a proactive approach to supporting the country's financial ecosystem.

"Our stance provides policy rate guidance without any direct guidance on liquidity management" - Sanjay Malhotra, RBI Governor
New Delhi, April 9: Hours after the Reserve Bank of India (RBI) announced a 25 basis points 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.

Key Points

1

RBI reduces repo rate to 6% supporting economic growth

2

Bank of India cuts lending rate to 8.85%

3

UCO Bank lowers rates to 8.8%

4

Move expected to encourage borrowing

The RBI's Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, reduced the key policy rate to 6 per cent from 6.25 per cent earlier in the day.

This marks the second consecutive cut under Malhotra's leadership and is aimed at supporting economic growth amid rising global challenges, including a steep 26 per cent tariff by the US on Indian exports.

Reacting swiftly to the RBI's move, Bank of India lowered 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 reduced its repo-linked lending rate to 8.8 per cent, with the revised rate 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.

This move is expected to make loans cheaper, encouraging more borrowing by individuals and businesses.

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, experts noted.

Governor Malhotra, while announcing the decision, also revealed a shift in the policy stance from 'neutral' to 'accommodative,' indicating that the central bank is willing to support growth through easier 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 last two months, along with a rate cut in February -- the first such move in five years.

Reader Comments

R
Rahul K.
Finally some good news for home loan borrowers! 😊 Was waiting for this rate cut since last year. Hope other banks follow soon.
P
Priya M.
While I appreciate the rate cut, I wish banks would be more transparent about how much of the reduction they actually pass to customers. Last time, my bank only gave 0.15% when RBI cut 0.25%.
S
Sanjay T.
Great move by RBI! This will help small businesses get cheaper loans. The timing is perfect with the export challenges we're facing.
A
Anjali P.
Does this mean my existing home loan EMI will reduce automatically? Or do I need to contact my bank? First-time borrower here, a bit confused.
V
Vikram S.
The shift to 'accommodative' stance is more significant than the rate cut itself. Shows RBI is serious about supporting growth. Smart policy making!
N
Neha R.
Hope private banks also reduce rates soon. My SBI loan already got cheaper but my husband's HDFC loan still has same rate. Not fair!

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Tags:
RBI Repo Rate Bank of India UCO Bank Sanjay Malhotra Lending Rates Monetary Policy
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