How much has the RBI cut the policy rate recently?
RBI reduced repo rate by 100 basis points over five months (Feb–June 2025), bringing it down to 5.5%
Agencies
RBI reduced repo rate by 100 basis points over five months (Feb–June 2025), bringing it down to 5.5%
How have the banks responded
On fresh loans: Weighted average lending rate (WALR) dropped 58 bps in June to 8.62%—the sharpest monthly decline— from 9.20% in May
On outstanding loans: WALR declined 22 bps in June to 9.45%
Bank group-wise transmission
- PSU banks: Strongest pass-through on outstanding loans: 34 bps, now at 8.76%
- Private banks: Lower transmission: 28 bps, with WALR at 10.47%
Agencies
Transmission of rate since February
On fresh loans (since Feb): 78 bps (9.40% to 8.62%) On outstanding loans: 33bps (9.78% to 9.45%)Benchmark Impact
- External Benchmark Linked Rate (EBLR): Immediate transmission
- Marginal Cost of Lending Rate (MCLR): Slower adjustment
- One-year average MCLR fell from 9% in March to 8.75% in June
