In response to the Reserve Bank of India’s (RBI) decision to reduce its short-term lending rate (repo rate) on Wednesday, four public sector banks have announced a reduction in their lending rates. Punjab National Bank (PNB), Bank of India, Indian Bank, and UCO Bank have all reduced their repo-linked benchmark lending rates (RBLR) by up to 35 basis points.
According to regulatory filings, Indian Bank’s RBLR will be lowered to 8.70 per cent effective April 11, while PNB’s RBLR will be reduced to 8.85 per cent effective April 10. Bank of India’s new RBLR stands at 8.85 per cent, effective from Wednesday. UCO Bank has brought down its repo-linked rate to 8.8 per cent, effective Thursday.
These rate reductions are expected to benefit both existing and new borrowers, as they will pay lower interest rates on their loans. Other banks are also likely to follow suit and announce similar rate reductions in the coming days.
The RBI’s decision to reduce the repo rate was seen as a move to boost economic growth, and the reduction in lending rates by these public sector banks is expected to have a positive impact on the overall economy. With borrowers paying lower interest rates on their loans, they will have more disposable income and may be more likely to make big-ticket purchases or invest in other financial assets, which can help stimulate economic growth.
Overall, the reduction in lending rates by these public sector banks is a positive development for borrowers and the economy as a whole. It is a step towards making credit more affordable and accessible, which can help drive economic growth and development.