The Reserve Bank of India slashed key interest rate by 25 basis points last week for the second time in a row to support growth facing the threat of reciprocal tariffs by the US. Interest rates for home, personal and vehicle loans as well as deposit rates have fallen in the ensuing days — with several major banks slashing their lending rates.
HDFC Bank was the first to cut its loan rate — cutting its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 basis points for various loan tenures starting April 7. Several other banks have followed suit after the RBI policy review announcement. Punjab National Bank indicated that it would implement a 25-basis-point cut to its Repo-Linked Lending Rate while Chennai-based Indian Bank heralded changes to its its Repo Benchmark Rate and Repo Linked Benchmark Lending Rates. The State Bank of India reduced its lending rate by 25 basis points earlier this week — bringing the Repo Linked Lending Rate (RLLR) to 8.25%. Bank of Baroda, Bank of India and Bank of Maharashtra have also announced a reduction in lending rates this month.
A decline in the repo rate translates into a reduced EMI for those paying a floating interest rate. Rate cuts announced by the RBI are considered to be an external benchmark for various banks to determine their interest rates. The repo-linked lending rate or RLLR is interest rate at which banks extend loans to customers — based on the repo rate set by the RBI. This is different from the Marginal Cost of Funds based Lending Rate or MCLR which is an internal benchmark set by each bank on the basis of its cost of funds and other factors.
Which banks have slashed lending rates in April 2025?
| Bank | Changes |
| State Bank of India | – Repo Linked Lending Rate reduced by 25 basis points to 8.25% – External Benchmark Based Lending Rate reduced by 25 basis points to 8.65% |
| HDFC Bank | – Marginal Cost of Funds-based Lending Rates trimmed by 10 basis points. The one-month MCLR rate now stands at 9.10% while the three-month rate is at 9.20%. The rate for 6 month, one year and two year loans has been revised to to 9.30%. The MLCR for three-year loans is now 9.35%. |
| Punjab National Bank | – Repo-Linked Lending Rate reduced from 9.10% to 8.85% including a 20 bps spread – Marginal Cost of Funds Based Lending Rate and Base Rate remain unchanged. |
| Indian Bank | – Repo Benchmark Rate dropped from 6.25% to 6.00% for all repo-linked loans. – Repo Linked Benchmark Lending Rates decreased from 9.05% to 8.70% |
| Bank of India | – Repo-linked benchmark lending rate reduced by 25 basis points, from 9.1% to 8.85% |
| Bank of Baroda | – External benchmark-linked lending rates cut by 25 basis points for loans catering to retail and MSME segments – Marginal cost of fund-based lending rate remains unchanged. Benchmark one-year tenor MCLR still at 9% |
| Bank of Maharashtra | – Repo-Linked Lending Rate reduced by 25 basis points — from 9.05% to 8.80% |