Bank of Baroda, a public sector bank, announced a reduction in interest rates for retail customers and micro, small, and medium enterprises (MSMEs) on Thursday.
This decision follows the Reserve Bank of India (RBI)’s move to cut the repo rate by 25 basis points to 6 percent on Wednesday.
The bank stated that the rate cut aims to pass on the benefits of the RBI’s monetary policy to customers, making loans more affordable for individuals and businesses.
Details of the Interest Rate Cuts
Bank of Baroda’s overnight marginal cost of funds-based lending rate (MCLR) has now dropped to 8.15 percent.
The one-year MCLR has also decreased to 9 percent. These cuts are designed to support economic growth and encourage financial inclusion by offering cheaper loans.
RBI Cuts Repo Rate
On Wednesday, RBI Governor Sanjay Malhotra announced a reduction in the repo rate from 6.25 percent to 6 percent. Along with this, the RBI shifted its monetary policy stance from “neutral” to “accommodative.”
Global financial firm Moody’s welcomed the repo rate cut, calling it a timely and necessary move.
Further Expectations of Rate Cuts
Moody’s analysts believe that the RBI may further reduce the repo rate by up to 75 basis points later this year.
Katrina Elle, Economic Research Director at Moody’s Analytics, stated that the RBI’s predictable approach during uncertain times helps stabilize the market, which has been experiencing volatility due to global events.
