Home / Business and Economy / RBI Cuts Repo Rate by 100 Bps, Banks Reduce Lending Rates
RBI Cuts Repo Rate by 100 Bps, Banks Reduce Lending Rates
4 Aug
Summary
- RBI reduced repo rate by 100 bps from Feb-June 2025
- Banks cut weighted average lending rate on fresh loans by 58 bps
- Sharpest monthly decline in lending rates in June 2025
The Reserve Bank of India (RBI) has taken significant steps to stimulate the economy by reducing the repo rate over the past few months. Between February and June 2025, the central bank cut the repo rate by a total of 100 basis points, bringing it down to 5.5%.
In response to the RBI's monetary easing, banks have also adjusted their lending rates. In June 2025, the weighted average lending rate (WALR) on fresh loans dropped by 58 basis points, reaching 8.62%. This represents the sharpest monthly decline in lending rates during this period.
The transmission of the RBI's rate cuts has been evident across the banking sector. On fresh loans, the WALR has declined by 78 basis points since February, while on outstanding loans, the WALR has decreased by 33 basis points.
These measures by the RBI and the subsequent response from banks are aimed at providing relief to borrowers and stimulating economic growth in the country.
