Your EMIs on Bank of Baroda loans will go down
What's the story
State-owned Bank of Baroda has announced a reduction in its Baroda Repo Linked Lending Rate (BRLLR) by 50 basis points to 8.15%.
The change is now in effect, and is in line with the recent cut in the benchmark repo rate by the Reserve Bank of India (RBI).
The revised BRLLR takes into account RBI's repo rate cut from 6% to 5.5%.
Rate adjustment
A look at RBI's repo rate cut
The RBI recently announced a 50 basis points cut in the repo rate, bringing it down to 5.5%.
This is the third consecutive reduction this year, following similar cuts in February and April.
The step comes amid falling retail inflation and is tipped to make loans cheaper for borrowers across sectors.
The move also comes after the Indian government released GDP numbers for Q4 and full year FY25, with Q4 growth beating estimates at 7.4%.
BoB rate
Effective lending rate now at 8.15%
Bank of Baroda clarified that the revised BRLLR reflects RBI's repo rate cut from 6% to 5.5%, while the mark-up component is unchanged at 2.65%. This results in a corresponding reduction in the effective lending rate from 8.65% to 8.15%.
Rationale
Rate cut based on assessment of current macroeconomic conditions
RBI Governor Sanjay Malhotra claimed the big rate cut was based on a detailed assessment of current macroeconomic conditions.
The repo rate is the key rate at which the central bank lends to commercial banks.
Since February this year, RBI has cut this repo rate by a total of 100bps, prompting most banks to lower their lending rates.