Lower home loan EMIs for PNB, Indian Bank, Bank of Baroda, BOI borrowers as RBI cuts repo rate by 50 bps

In a significant development for home loan borrowers, four major public sector banks Punjab National Bank (PNB), Bank of Baroda (BoB), Indian Bank and Bank of India (BOI have announced reductions in their home loan interest rates. These revisions come on the heels of the Reserve Bank of India’s (RBI) decision to cut the repo rate by 50 basis points (bps), bringing it down from 6.00% to 5.50% in the monetary policy review held on June 6, 2025. The central bank has now reduced the repo rate by a total of 100 basis points (1%) since February 2025.

Impact on home loan borrowers

RBI's rate actions have a direct impact on home loan interest rates that are linked to the repo rate, or Repo Linked Lending Rates (RLLR). A lower repo rate usually translates into a lower RLLR, which means that consumers will pay less in interest over the course of the loan term and have fewer EMIs (equivalent monthly installments).
Big savings for home loan borrowers as EMIs to fall significantly after RBI cuts repo rate by 50 bps

What is RLLR?

Repo-linked lending rate (RLLR) is the interest rate at which banks extend loans to customers, based on the repo rate set by RBI. The term “repo-linked lending rate” refers to an interest rate that is linked to the repo rate. An RBI circular issued in October 2019 mandates that banks link their retail loans to external benchmark lending rates, known as E-BLR. Consequently, the repo rate has become the benchmark for most banks.

The impact of the reduction of RLLR will be different on old and new home loan borrowers. Most of these banks have passed on the reduction benefit to new borrowers immediately. However, their old borrowers will get the benefit as per their corresponding interest rate reset cycle.

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Which banks have slashed home loan rates?

Punjab National Bank (PNB)
In a regulatory filing, PNB announced that it has revised its Repo Linked Lending Rate (RLLR) from 8.85% to 8.35%, effective June 9, 2025. The new rate reflects the 50 basis point cut in the repo rate and includes a Bank Spread of 20 basis points.

“The Exchange is hereby informed that consequent upon the decrease in Repo rate by RBI on 06.06.2025, the Bank has revised RLLR from 8.85% (including BSP of 20bps) to 8.35% (including BSP of 20bps) with effect from 09.06.2025,” PNB stated in its filing.

Bank of Baroda (BoB)

Bank of Baroda, in compliance with SEBI's disclosure norms, informed the exchanges that it has reduced its Baroda Repo Based Lending Rate (BRLLR) from 8.65% to 8.15%, effective June 7, 2025. This is also a 50 basis point reduction, in line with the RBI’s move.

“Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform that BRLLR has been revised from 8.65% to 8.15% with effect from 07.06.2025,” the bank said.

Bank of India
Bank of India has also joined the rate-cut bandwagon, reducing its Repo Based Lending Rate (RBLR) from 8.85% to 8.35%, effective June 6, 2025.

The bank in a BSE announcement stated, “Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform that Repo Based Lending Rate (RBLR) has been changed w.e.f. 06.06.2025. 2. Today, RBI has revised the Repo Rate from 6.00% to 5.50% (decrease of 50 bps).The change in RBLR is as under. The effective RBLR is revised from 8.85% to 8.35%, down by 50 bps.”

Indian Bank
Indian Bank has cut its Repo Linked Benchmark Lending Rates (RBLR) from 8.70% to 8.20%, with the revised rate effective from June 6, 2025, the bank informed in regulatory filing.