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In a major relief for borrowers, Punjab National Bank (PNB) has announced a significant cut in its loan interest rates following the Reserve Bank of India's (RBI) monetary policy decision. Starting June 9, 2025, loans from PNB will become more affordable as the bank reduces its lending rates by 50 basis points (bps).

RBI’s Surprise Move Triggers Positive Response from Banks

On June 6, 2025, the Monetary Policy Committee (MPC) of the Reserve Bank of India, headed by Governor Sanjay Malhotra, announced a surprise 50 bps reduction in the repo rate, bringing it down from 6.00% to 5.50%. This decision was made with a 5-1 majority vote and is aimed at easing borrowing costs across the economy.

In addition to the repo rate cut, the RBI also reduced the Cash Reserve Ratio (CRR) by 100 bps, from 4% to 3%, injecting ₹2.5 lakh crore into the banking system to enhance liquidity.

This is the third rate cut of 2025, totaling 100 bps so far, with earlier reductions in February and April. These steps are part of the central bank’s strategy to boost economic activity and reduce the cost of borrowing for both individuals and businesses.

PNB’s Swift Response: Cheaper Loans for All

In a prompt reaction to the RBI's policy, Punjab National Bank became one of the first major lenders to pass on the benefit to its customers. The bank announced a reduction of 50 bps in its Repo Linked Lending Rate (RLLR) effective June 9, 2025.

This means that starting next week:

• Home loans from PNB will start at an interest rate of 7.45% per annum

• Auto loans will begin at 7.8% per annum

PNB made the announcement through its official X (formerly Twitter) handle, stating:

“Good news for our valued customers! PNB makes your EMI more affordable! Following the repo rate cut (6.00% to 5.50%), we’ve reduced our RLLR by 50 bps effective June 9, 2025.”

What This Means for Borrowers

The reduction in loan interest rates is expected to ease the financial burden on both existing and new borrowers. With the lower RLLR, customers will enjoy reduced Equated Monthly Installments (EMIs), making high-value purchases like homes and cars more accessible.

This also opens opportunities for customers to refinance existing loans at lower rates or apply for new credit at more favorable terms. The move is likely to stimulate credit demand across housing, automobile, and personal loan segments.

Other Banks Likely to Follow

With RBI’s bold rate cut and PNB’s proactive response, industry experts anticipate that other public and private sector banks may soon follow suit and announce similar rate cuts. This could create a ripple effect, making credit cheaper across the board and fueling consumer spending—a key lever for economic growth.

Final Thoughts

The synchronized action between the RBI and PNB reflects a strong intent to revive economic momentum by lowering borrowing costs. For consumers, this translates into an opportunity to plan long-term purchases with lighter EMIs and more manageable debt servicing.

If you’re planning to take a home, auto, or personal loan, now might be the ideal time to explore your options with PNB and potentially other lenders that may join the rate cut wave in the coming days.