Bank of Baroda Passes on RBI Rate Cut to Retail and MSME Borrowers

By siliconindia  |  Thursday, 10 April 2025, 12:39:24 PM IST

Bank of Baroda Passes on RBI Rate Cut to Retail and MSME Borrowers
A day after the Reserve Bank of India (RBI) cut the repo rate by 25 basis points, public sector bank Bank of Baroda has quickly passed on the advantage to its clients. The bank announced a cut in its external benchmark-based lending rates on retail and MSME loans to ensure effective transmission of the easing of monetary policy.
With this action, the retail and MSME segment borrowers will now be able to access lower-cost credit, which further strengthens the bank's growth and inclusive lending focus. "This step confirms Bank of Baroda's intent to offer credit at low prices to individuals and enterprises, while fostering economic growth and financial inclusion in the broader economy," the bank stated.
Bank of Baroda's Overnight Marginal Cost of Funds-Based Lending Rate (MCLR) is currently 8.15%, while the One-Year MCLR is 9%, making the bank one of the most competitively priced in the industry.
RBI Governor Sanjay Malhotra-headed Monetary Policy Committee  took the decision in unison on Wednesday to lower the benchmark repo rate by 25 basis points to 6.25% from 6.5%. This was the first rate cut since the start of May 2020 when the central bank had lowered the rates to shield the economy from the blow of the COVID-19 pandemic. RBI had started increasing rates in May 2022 because of global geopolitical tensions, before standing pat from May 2023.
Thanks to Bank of Baroda's swift action, the policy action by the central bank is likely to give relief on time to small business and individual borrowers alike.
 

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