PNB Cuts Lending Rate by 50 bps

New Delhi, Jun 6 (PTI) Hours after RBI's jumbo rate cut, state-owned Punjab National Bank (PNB) on Friday announced up to 50 basis points reduction in lending rate, a move which will help existing and new borrowers.

Other banks are also expected to make similar announcements soon.

"Great News for Our Valued Customers! Punjab National Bank Makes Your EMIs More Affordable! Following the repo rate cut (6.00% - 5.50%), Punjab National Bank has reduced its RLLR by 50 bps, effective from June 9, 2025," PNB said in a post on X.

With the reduction in the benchmark repo-linked benchmark lending rates (RBLR), the home loan of the bank will start from 7.45 per cent while vehicle loans from 7.8 per cent per annum.

Earlier in the day, the Reserve Bank of India (RBI) cut interest rates by a larger-than-expected 50 basis points, and unexpectedly reduced the cash reserve ratio for banks to make available more money to lend in a bid to boost the economy.

The RBI's six-member monetary policy committee, headed by Governor Sanjay Malhotra and consisting of three external members, voted five to one to lower the benchmark repurchase or repo rate by 50 basis points to 5.5 per cent. It also cut the cash reserve ratio by 100 basis points to 3 per cent, adding Rs 2.5 lakh crore to already surplus liquidity in the banking system.

With the latest reduction, the RBI has now cut interest rates by a total of 100 basis points in 2025, starting with a quarter-point reduction in February -- the first cut since May 2020 -- and another similar-sized cut in April.

The central bank, at the same time, changed its monetary policy stance from 'accommodative' to 'neutral', meaning rates could increase or decrease in future depending on incoming data, with Malhotra stating that it may have limited space for further easing.