Mumbai: Leading public sector bank in the country, Canara Bank has reduced its repo-linked lending rate (RLLR) by 25 basis points. The move follows the Reserve Bank of India’s Monetary Policy Committee (MPC) decision earlier this month to cut the repo rate from 6.25 per cent to 6 per cent.
With the RLLR reduction, the minimum rate of interest for all the loans have been lowered out of which, the popular loan products are:
Housing Loans – Now starting at 7.90% per annum.
Vehicle Loans – Now starting at 8.20% per annum.
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In a similar move, Indian Bank has lowered its home loan rates from 8.15% to 7.90% per annum and vehicle loan rates from 8.50% to 8.25% per annum. The State Bank of India, the largest public sector bank in the country, has recently reduced its lending rates by up to 0.25%. Starting April 15, 2025, the bank’s EBLR (External Benchmark Based Lending Rate) has been adjusted from 8.90% to 8.65%. Similarly, Punjab National Bank has also decreased its RLLR from 8.90% to 8.65%.
MCLR is the minimum rate of interest banks are allowed to give out loans to its customers. It is a benchmark interest rate and it dictates the lower limit of the interest rate for a loan. In 2019, the RBI introduced the external benchmark linked rate (EBLR) – which is linked to the repo rate – to further increase the pace of monetary policy transmission. Currently, all the retail loans are linked to EBLR. While any hike or cut in the repo rate gets immediately reflected in loans linked to EBLR, banks review interest rates under MCLR regime every month at a pre-announced date.
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