EMIs Drop for Home Loan Borrowers as PNB, Canara Bank Cut Repo Linked Lending Rates

The Reserve Bank of India’s 25 basis points repo rate cut to 6.25% has prompted banks like Canara Bank, PNB, and Union Bank to lower their repo-linked lending rates. This offers home loan borrowers the option to reduce their EMIs or shorten loan tenure, benefiting both new and existing borrowers.

Banking Giants Revise Repo Linked Lending Rates Post RBI Cut

Canara Bank has lowered its Repo Linked Lending Rates (RLLR) from 9.25% to 9%, applicable to new loans and accounts completing 3 years under the RLLR regime from February 12, 2025.

Similarly, Bank of India reduced its rate from 9.35% to 9.10% starting February 7, 2025.

Union Bank of India has brought its rate down to 9% from 9.25% as of February 11, 2025, while Punjab National Bank has adjusted its RLLR to 9% from 9.25% on February 10, 2025.

These rate cuts follow the RBI’s decision to lower the repo rate from 6.50% to 6.25%, bringing relief to borrowers.

Repo Linked Lending Rate Explained

Repo Linked Lending Rate (RLLR) refers to the interest rate at which banks lend to customers, determined by the repo rate set by the Reserve Bank of India (RBI).

RLLR is the interest rate directly tied to the repo rate, meaning that as the RBI adjusts its repo rate, the lending rates of banks also change accordingly.

Following an RBI directive in October 2019, banks were required to link their retail loans to external benchmark lending rates (E-BLR), with the repo rate becoming the primary benchmark for most financial institutions.

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