Indian Overseas Bank (IOB) has announced a reduction in its External Benchmark Lending Rate (EBLR) by 25 basis points, effective April 12, 2025. This decision comes in response to the Reserve Bank of India’s (RBI) Monetary Policy Committee’s (MPC) announcement of a 25 bps cut in the repo rate, which occurred between April 7 and 9, 2025. The RBI’s repo rate has been adjusted to 6.00% from 6.25%. The reduction will boost borrowers with loans linked to the repo rate, leading to lower Equated Monthly Installments (EMIs) for home loans, auto loans, and other credit facilities.
IOB’s Assets and Liabilities Management Committee (ALCO) reviewed the RBI’s move before approving the rate revision. The Repo Linked Lending Rate (RLLR) will now stand at 8.85% down from the previous 9.10%. This reduction is expected to ease the financial burden on existing and new borrowers, making credit more affordable. This move is an effort by IOB to pass the benefits of RBI’s policy easing on to its customers, potentially contributing to economic growth and stimulating borrowing activities. The 25 basis points cut in the EBLR is likely to prompt other banks to adjust their lending rates accordingly.