Soon after the Reserve Bank of India cut repo rate, several public sector banks have announced revision of their lending rates by up to 35 basis points. This will bring down the interest rates on all repo-linked loan products, including home and personal loans.

Chennai-based Indian Bank said it would lower its repo-linked benchmark lending rates (RBLR) by 35 basis points to 8.70%, effective 11 April.

Punjab National Bank will bring down its RBLR to 8.85% from 9.10%, with effect from 10 April. No changes are made to the bank’s existing marginal cost of funds-based lending rate (MCLR) and base rate.

Bank of India has reduced its RBLR to 8.85%, compared to 9.10% earlier.

UCO Bank will cut the repo-linked rate to 8.8% from 10 April.

Bank of Baroda announced on 10 April a 25 basis points cut in its external benchmark-linked lending rates for loans catering to retail and MSME segments. The bank said it has left the MCLR unchanged.

On 9 April, the RBI cut the repo rate for the second straight time by 25 basis points to 6%.

Earlier, two days before the RBI’s interest rate cut announcement, HDFC Bank reduced its MCLR by 10 basis points across tenures. 

With this, the MCLR  of the country's largest private lender stood in the 9.10-9.35% range. One-year MCLR, which is often used for pricing corporate loans, fell to 9.30% from 9.40%.

HDFC Bank had earlier ended its special deposit scheme, under which it offered 7.35% for 35-month retail deposits and 7.40% on 55-month deposits. It is now offering 7% on these two tenures.

Repo-linked lending rate is the interest rate at which banks extend loans to customers, based on the repo rate set by RBI. Since most home loan borrowers opt for a floating rate, their loans are linked to this.

In case of repo-linked benchmark rate, the transmission of regulatory rate cuts happens quickly. But for MCLR-linked loans there is a lag as the transmission depends on banks' costs.