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Bank of India cuts lending rate by 25 bps after RBI's repo rate reduction to 6%

Bank of India cuts lending rate by 25 bps after RBI's repo rate reduction to 6%

The Bank of India has adjusted its RBLR to maintain a markup of 2.85% over the revised repo rate. Previously, the effective RBLR was 9.10% when the repo rate was 6.25%.

Business Today Desk
Business Today Desk
  • Updated Apr 9, 2025 5:42 PM IST
Bank of India cuts lending rate by 25 bps after RBI's repo rate reduction to 6%Shares of Bank of India ended the day 2.28% lower at Rs 106.76 on the National Stock Exchange.

Bank of India has lowered its repo-based lending rate (RBLR) by 25 basis points to 8.85%, effective Wednesday, following the Reserve Bank of India’s decision to cut the benchmark repo rate.

The bank stated in an exchange filing that its RBLR, previously at 9.1%, has been revised after the RBI reduced the repo rate from 6.25% to 6%. The move comes after RBI Governor Sanjay Malhotra announced a 25-basis-point cut and shifted the policy stance from "neutral" to "accommodative."

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In its latest monetary policy update, the RBI also released key highlights including the revised stance and a GDP forecast for FY26.

Shares of Bank of India ended the day 2.28% lower at Rs 106.76 on the National Stock Exchange, underperforming the benchmark Nifty, which fell 0.61%. The stock is down 24.74% over the past 12 months but remains up 4.77% on a year-to-date basis.

Earlier in the day, the Monetary Policy Committee (MPC) comprising three central bank members and an equal number of external members unanimously decided to reduce the repurchase rate (repo rate) by 25 basis points to 6%. This follows a similar rate cut in February, marking the first reduction since May 2020.

The decrease in borrowing costs brings them to the lowest level since November 2022, driven by easing inflation and a decline in oil prices. In response to these developments, the Reserve Bank of India (RBI) shifted its policy stance from "neutral" to "accommodative", signaling potential future rate cuts, as announced by Governor Sanjay Malhotra during the MPC meeting.

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This rate adjustment coincided with the implementation of a 26% increase in tariffs on Indian exports to the US, further adding to economic uncertainties. Some experts anticipate a 20-40 basis point impact on India's GDP growth for the current fiscal year, which began on April 1st.

Published on: Apr 9, 2025 5:42 PM IST
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