Good News For Homebuyers! Punjab National Bank Slashes Lending Rates After RBI's Repo Rate Cut

Punjab National Bank (PNB), one of India's largest PSU lenders, has announced a sharp 50 basis points reduction in its lending rates in response to the RBI Monetary Policy Committee's (MPC) decision to slash the repo rate from 6.00% to 5.50%, which was announced yesterday.

Punjab National Bank Cuts Lending Rates by 50 Basis Points

The bank was informed about the decision via an X post on June 6. PNB confirmed a reduction of 50 bps in its Repo Linked Lending Rate (RLLR), which will now be effective from June 9, 2025. This means that borrowers can now enjoy lower EMIs on home loans, car loans, and personal loans.

"Great News for Our Valued Customers! Punjab National Bank Makes Your EMIs More Affordable" , indicating that PNB home loans will now start from just 7.45%, while vehicle loans will be available from 7.80% per annum.

Why Did PNB Reduce Interest Rates?

This decision by Punjab National Bank was taken after RBI's surprise 50-basis-point repo rate cut, the sharpest since the Covid-19 emergency easing in March 2020. The central bank, under Governor Sanjay Malhotra, also reduced the cash reserve ratio (CRR) by 100 basis points to 3%, injecting over ₹2.5 lakh crore into the banking system to stimulate lending and spending.

With more liquidity and a lower cost of funds, banks like Punjab National Bank are in a better position to offer affordable credit to individuals and businesses.

"RBI's announcement of a further rate cut of 50 bps is a significant proactive step at a time when demand for residential real estate is seeing signs of slowing down across segments due to increased prices. Home ownership continues to be an aspiration and dream for every Indian household, and these rate cuts, followed by reduced home loan interest rates, will strengthen home buyer confidence. A cumulative rate cut of 1 per cent in the past 6 months is likely to benefit the affordable segment significantly, which was most impacted due to affordability." Said Amit Bhagat, Co-Founder, CEO and MD, ASK Property Fund

What It Means for Borrowers

If you're planning to take a PNB home loan in June 2025, now is the time. With the repo-linked lending rate (RLLR) falling, EMIs on both existing and new loans will reduce. This will directly benefit salaried individuals, small businesses, and first-time homebuyers looking for low-interest loans in India.

Here's a snapshot:

PNB home loan interest rate starts at 7.45% p.a.

PNB car loan rate begins at 7.80% p.a.

PNB personal loans and MSME loans to follow new lower benchmark rates

What Experts Say: More Rate Cuts Ahead?

With the RBI signalling that it's shifting its stance to boost growth, more public sector banks (PSBs) and private banks may follow Punjab National Bank in announcing interest rate cuts in June 2025. Borrowers are advised to keep an eye on announcements from SBI, Bank of Baroda, Canara Bank, and HDFC Bank