Synopsis
Following the RBI's 25 basis points repo rate cut announcement, Bank of India and UCO Bank have reduced their lending rates, providing relief for borrowers amid economic challenges.Key Takeaways
- Bank of India cuts RBLR to 8.85 percent.
- UCO Bank lowers repo-linked rate to 8.8 percent.
- RBI's repo rate reduced to 6 percent.
- Policy stance shifted to accommodative.
- Expect more banks to follow this trend.
New Delhi, April 9 (NationPress) Shortly after the Reserve Bank of India (RBI) announced a 25 basis points reduction in the repo rate, two prominent public sector banks — Bank of India and UCO Bank — took swift action on Wednesday to lower their lending rates, providing significant relief to both existing and prospective borrowers.
The RBI’s Monetary Policy Committee (MPC), under the leadership of Governor Sanjay Malhotra, adjusted the key policy rate down to 6 percent from 6.25 percent earlier that day.
This represents the second consecutive reduction during Malhotra’s tenure, aimed at fostering economic growth amidst increasing global challenges, such as a steep 26 percent tariff imposed by the US on Indian exports.
In response to the RBI’s announcement, Bank of India decreased its Repo Based Lending Rate (RBLR) to 8.85 percent, down from 9.10 percent.
This new rate took effect immediately on April 9.
Similarly, UCO Bank also lowered its repo-linked lending rate to 8.8 percent, with the updated rate going into effect from Thursday.
Both banks communicated the rate cuts through separate regulatory filings, citing the most recent RBI policy decision as the catalyst for the adjustment.
This action is anticipated to render loans more affordable, thereby encouraging increased borrowing by individuals and businesses alike.
Experts predict that other banks will likely follow suit in the upcoming days, passing on the advantages of the RBI’s rate cut to customers nationwide.
Governor Malhotra, while announcing the decision, also indicated a policy stance shift from ‘neutral’ to ‘accommodative,’ signifying that the central bank is inclined to support growth through a more lenient monetary policy.
“Our stance provides policy rate guidance without any direct guidance on liquidity management,” he stated.
The RBI has already injected over $80 billion into the banking system over the past two months, alongside a rate cut in February — marking the first such move in five years.
