Daijiworld Media Network – New Delhi

New Delhi, Apr 9: In a significant move to bolster borrowing and stimulate economic growth, two major public sector banks Bank of India and UCO Bank have slashed their lending rates just hours after the Reserve Bank of India (RBI) announced a 25 basis points cut in the repo rate.

The RBI’s Monetary Policy Committee (MPC), chaired by governor Sanjay Malhotra, reduced the key repo rate from 6.25 per cent to 6 per cent on Wednesday marking the second consecutive cut under Malhotra’s leadership. The move comes amid global headwinds, including the imposition of a steep 26 per cent tariff by the United States on Indian exports.

Reacting promptly, the Bank of India revised its Repo-Based Lending Rate (RBLR) from 9.10 per cent to 8.85 per cent, with the change taking effect immediately on April 9. UCO Bank also followed suit, cutting its repo-linked lending rate to 8.8 per cent, effective from Thursday.

Both banks confirmed the rate revisions in regulatory filings, citing the central bank’s policy shift.

The fresh cut is expected to lower loan EMIs for both existing and new borrowers, while encouraging fresh credit demand across retail, MSME and corporate segments. Financial experts anticipate that more banks will align their lending rates with the RBI’s policy in the coming days.

Governor Malhotra, while unveiling the monetary policy, also announced a shift in the RBI’s stance from ‘neutral’ to ‘accommodative,’ signaling a stronger commitment towards boosting economic growth.

“Our stance provides policy rate guidance without any direct guidance on liquidity management,” Malhotra stated, highlighting the central bank’s flexibility in ensuring adequate credit flow in the economy.

In addition to the latest rate cut, the RBI has already infused over $80 billion into the banking system in the past two months — a part of its broader strategy to ease financial conditions and reinvigorate lending activity.