Following a significant 50 basis point reduction in the repo rate by the Reserve Bank of India (RBI), Punjab National Bank (PNB) has also provided relief to its customers. The bank has decided to reduce its Repo Linked Lending Rate (RLLR) by 50 basis points.
Business News: Positive news has emerged from the Indian banking sector. Punjab National Bank (PNB) has announced a 50 basis point reduction in its Repo Linked Lending Rate (RLLR), offering loan relief to its customers. This move will directly benefit customers availing home loans, car loans, or small business loans from the bank. The new interest rates came into effect on June 9, 2025.
This decision comes at a time when the Reserve Bank of India (RBI) has cut the repo rate, leading several banks across the country to ease interest rates. This PNB initiative will directly impact customers' finances, particularly those with loans linked to the RLLR.
PNB Reduces RLLR; Home and Car Loan EMIs to Decrease
PNB shared this information on the social media platform X (formerly Twitter), stating that their home loan interest rates will now start at 7.45% per annum and vehicle loans at 7.80% per annum. Previously, these rates were 7.95% and 8.30%, respectively. This means that customers who have already availed RLLR-based loans from the bank will see their EMIs automatically reduced without needing any further action.
Benefits for Customers?
- A monthly reduction of ₹300-₹800 in home loan EMIs is possible (depending on the loan amount and tenure).
- Lower interest rates on car loans will make vehicle purchases somewhat cheaper.
- Business loan borrowers will also benefit from lower interest rates, strengthening their cash flow.
- Existing loan holders will not undergo any additional paperwork; the changes will be implemented automatically.
RBI's Decision Opens Avenues for Relief
The RBI has progressively reduced the repo rate in recent months. During the COVID-19 pandemic (May 2020 - April 2022), the repo rate was 4%. However, it was subsequently raised to 6.5% to control inflation. Now, with signs of economic improvement, the RBI has adopted a path of interest rate cuts, providing relief to ordinary citizens.
Response from Other Banks
Besides PNB, other major banks in the country have also reduced loan rates:
- HDFC Bank: Announced a reduction in MCLR on June 7.
- Bank of Baroda: Reduced BRLLR (Baroda Repo Linked Lending Rate) from 8.65% to 8.15%.
- Indian Bank: Reduced RBLR from 8.70% to 8.20%.
This has sparked a competition among banks for lower interest rates, leading to increased competition in the loan market.
If you have an RLLR-based loan, you do not need to submit any new application. Your next EMI billing will automatically reflect the reduced interest rate. If you haven't yet availed an RLLR-based loan, now might be the time to link your loan to this system.
