Bank of Baroda Cuts Loan Interest Rates After RBI Repo Rate Reduction – Know the New BRLLR

In a major relief for borrowers, Bank of Baroda (BoB) has announced a significant cut in its loan interest rates, following the recent monetary policy move by the Reserve Bank of India (RBI). The bank has slashed its Baroda Repo Linked Lending Rate (BRLLR) by 50 basis points (0.50%), bringing it down from 8.65% to 8.15%, effective from June 7, 2025.

This move is expected to reduce the EMI burden for new and existing borrowers, making home loans, auto loans, and personal loans more affordable.

Why Has Bank of Baroda Reduced Its Lending Rate?

The reduction in BoB’s lending rate comes after the RBI cut its repo rate by 0.50%, bringing it down from 6.00% to 5.50%. The repo rate is the interest rate at which the RBI lends funds to commercial banks. A reduction in this rate typically leads to lower borrowing costs across the banking sector.

Additionally, the Cash Reserve Ratio (CRR) was also reduced by 1%, from 4% to 3%, allowing banks to keep less money in reserve and extend more loans to customers.

What is BRLLR and Why It Matters

The Baroda Repo Linked Lending Rate (BRLLR) is BoB’s benchmark rate that determines the interest charged on retail loans. Since it's directly linked to the RBI's repo rate, any changes in the repo rate affect the BRLLR – and in turn, the interest customers pay on their loans.

With the BRLLR now set at 8.15%, new loan applicants will benefit from lower interest outgo, especially for long-term loans such as home loans.

Impact on Borrowers: Lower EMIs, Bigger Savings

This move translates into a reduction in monthly EMI payments for new and floating-rate loan borrowers. Whether you're looking to take a home loan, car loan, or personal loan, this rate cut makes borrowing cheaper and easier. It's a welcome step particularly for individuals planning to take loans in the near future.

Bank of Baroda’s Financial Highlights (Q4 FY2024–25)

• Net Profit: ₹5,048 crore – up 3.2% year-on-year, surpassing analyst estimates.

• Other Income (including fees and commissions): ₹5,210 crore – a 24% rise.

• Net Interest Income (NII): Dropped 6.6% to ₹11,019 crore, reflecting changing lending margins.

• Asset Quality: Improved significantly.

  • Gross NPA: Down to 2.26%

  • Net NPA: Reduced to 0.58%

• Stock Performance: On Friday, BoB shares closed ₹4.30 lower at ₹246.30.

How Should Customers Respond?

If you are considering a new loan, this is a good time to apply. The lower BRLLR means reduced borrowing costs and more attractive interest rates on loans. For existing floating-rate customers, this could lead to a reduction in EMIs over the coming months.

In Summary

Bank of Baroda's decision to lower its lending rate reflects the broader monetary easing by the RBI. The move aims to spur credit demand, support economic activity, and offer relief to retail borrowers. As one of India’s leading public sector banks, BoB’s interest rate revision could influence rate moves by other lenders as well.

Customers should monitor loan offers closely and consult with the bank to understand how much they can save on EMIs.