Equated monthly instalments (EMIs) for borrowers in a variety of loan categories, including house, vehicle, and personal loans, are expected to drop as a result of the banks' rate reductions, providing timely respite ahead of the new year.
The RBI's Monetary Policy Committee (MPC) lowered the repo rate from 5.50% to 5.25% in its December 2025 review, one of three rate reductions this year intended to support credit expansion in the face of declining inflation and mild economic challenges.
State Bank of India
Many public sector banks announced cuts to their lending benchmarks linked to the
Due to a 25-basis-point reduction in the benchmark component, SBI's EBLR was reduced from 8.15% to 7.90%, including Credit Risk Premium (CRP) and Bank Spread (BSP). Similarly, SBI's RLLR—which is closely linked with the RBI's repo rate—was lowered from 7.75% plus CRP to 7.50% plus CRP.
Punjab National Bank
Additionally, Punjab National Bank announced a reduction in its Repo Linked Lending Rate. With a 10-basis point bank spread included, the rate was lowered from 8.35% to 8.10%. The updated prices went into effect on December 6, 2025.
Canara Bank
The RLLR of Canara Bank has been lowered by 25 basis points, from 8.25% to 8%. The RBI's repo rate cut is immediately reflected in the revised rate, which went into effect on December 12.
Indian Overseas Bank
With effect from December 15,Indian Overseas Bank has updated its RLLR to 8.10%. In addition, the bank's three-year MCLR is now 8.85% and its one-year MCLR is 8.80%.
Indian Bank
The RLLR of Indian Bank was lowered from 8.20% to 7.95%, and the new loan rates went in effect on December 6. The bank's asset portfolio will be subject to the increased rates.
Bank of India
With effect from December 5, Bank of India has also lowered its Repo Based Lending Rate (RBLR) from 8.35% to 8.10%. The RBI announced a downward revision in the repo rate during its monetary policy meeting, according to a Bank of India announcement on the BSE website.
Bank of Baroda
Bank of Baroda's effective BRLLR would drop from 8.15% to 7.90%, providing borrowers with a little reduction in their loan interest requirements. The Bank of Baroda's revised rates went into effect on December 6.
Bank of Maharashtra
In response to the RBI repo rate drop, Bank of Maharashtra has announced a drop in its retail lending interest rates. The bank has reduced its house loan rates from 7.35% to 7.10%, providing potential homeowners with cheaper EMIs. Additionally, the interest rate on car loans has been lowered from 7.70% to 7.45%, making it easier for new borrowers to buy cars on a loan.
Millions of current and potential borrowers will benefit from cheaper EMIs as a result of these changes, making lending more accessible in the face of growing demand for consumer and housing loans.
