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The effect of RBI’s repo rate cut is beginning to be seen. Punjab National Bank, one of the largest government banks in the country, has reduced its interest rates. Apart from PNB, many banks have also made their loans cheaper.
New Delhi. The effect of the latest repo cut by the Reserve Bank of India is beginning to be visible in the market. Punjab National Bank PNB responded immediately and reduced its home loan interest rate. Now the repo linked lending rate of the bank has become 8.10 percent which was earlier 8.35 percent. This new rate is applicable from December 6, 2025 and will continue till the next review. On December 5, the Monetary Policy Committee of RBI had reduced the repo rate by 25 basis points to 5.25 percent. Governor Sanjay Malhotra had said that this step is necessary to keep the economy stable amidst increasing growth and calming inflation. After this decision, rate cut has started being passed on in the banking system.
After the implementation of new rates of PNB, interest on home loan has become cheaper. There will be a significant reduction in EMI for long loan tenure like 20 or 30 years. There has been no change in the MCLR and base rate of the bank. This is the fourth time in 2025 that RBI has reduced the policy rates. With a total reduction of 125 basis points, borrowing has become much easier than before. Experts say that some banks may take another 1 to 2 months to completely transmit the new rates.
PNB shares rise, investor confidence strong
The positive effect of this announcement was visible in the market. On December 6, 2025, PNB shares closed at Rs 121.70 on BSE, which is Rs 2.15 more than the previous close. According to experts, the reduction in interest rates will improve both the lending capacity of the bank and its hold in the market, which is expected to increase loan growth further.
Other government banks also in line
Apart from PNB, many other government banks have also announced to reduce interest rates. Indian Bank has reduced its repo linked benchmark rate from 8.20 percent to 7.95 percent. This is applicable from 6th December. Bank of India Bank of India has also reduced its repo based lending rate by 25 basis points to 8.10 percent. The bank says that this change has been made due to the repo cut by RBI.
How much will be saved in pocket?
Experts say that on a home loan of Rs 50 lakh, a customer can save around Rs 5000 to Rs 6000 every month for a tenure of 20 years. Lower interest rate has a direct impact on the EMI, which makes the home buyer’s pocket lighter and the purchase decision easier to take.
