Bank of Baroda Reduces Lending Rate By 5 Basis Points

Bank of Baroda has cut its marginal cost of funds-based lending rate by 5 basis points after the Reserve Bank of India's rate reduction.

The public sector bank has brought down the MCLR rates across one-month, three-month, six-month and one-year tenures. The bank has made a shallow cut of 5 bps in these rates, according to an exchange filing on Tuesday.

Last week, the 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%. It also cut the cash reserve ratio by 100 basis points to 3%, 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.

(With inputs from PTI)

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