Mumbai: Public sector lender Bank of Maharashtra (BoM) on Sunday announced a 25-basis-point cut in interest rates on several retail loans, including home, car, education and other RLLR-linked products.
The move comes a day after the Reserve Bank of India (RBI) reduced the repo rate to 5.25 per cent in an effort to support economic growth.
With the revised rates coming into effect from Saturday, BoM said its home loans will now start at 7.10 per cent, while car loans will begin at 7.45 per cent.
The bank added that these are among the most competitive rates currently available in the banking sector.
BoM said in a statement that lowering retail loan rates reflects its commitment to offer affordable financing solutions to customers.
The bank added that making loans cheaper at a time when interest rates have been relatively high will bring relief and encourage more people to take loans for homes, cars and education.
The reduction follows Friday’s monetary policy announcement, where RBI Governor Sanjay Malhotra said the Monetary Policy Committee had unanimously decided to bring down the repo rate by 25 basis points from 5.5 per cent to 5.25 per cent to boost economic momentum.
He also announced measures to enhance liquidity, including open market purchases of government securities worth Rs 1 lakh crore and a $5 billion dollar-rupee swap arrangement.
Malhotra said India’s strong economic growth of 8.2 per cent in the second quarter and a sharp drop in inflation to 1.7 per cent had created favourable conditions — a “Goldilocks period” — that allowed the RBI to cut rates without risking price stability.
The central bank also raised its GDP growth forecast for the current financial year to 7.3 per cent.
He added that the RBI will continue with its neutral policy stance, maintaining a balanced approach to support growth while keeping inflation under control.
The governor also highlighted that India’s foreign exchange reserves had climbed to $686 billion, providing an import cover of 11 months, though he warned that geopolitical uncertainties remain a concern.
As the RBI pushes for lower borrowing costs and injects more liquidity into the system, banks are expected to pass on these benefits to customers.
BoM is among the first to implement the rate cut, a move that could encourage other lenders to follow.
(IANS)
