At least three PSU banks have fully passed on the 75-basis-point cut in the repo rate announced by the RBI, setting the stage for others to follow suit.

State Bank of India, Bank of India and Bank of Baroda have cut lending rates linked to the external benchmark rate. The repo rate has now been lowered to 4.40 per cent as part of the RBI’s measures to shield the domestic economy from the adverse effects of coronavirus.

On Monday, Bank of Baroda (BoB), the country’s second largest public sector lender, said it has reduced its Baroda repo linked lending rate (BRLLR) by 75 basis points with effect from March 28.

The lender added that the BRLLR for new floating rates for all personal and retail loans and loans to micro, small and medium enterprises will be 7.25 per cent. For existing loans, the interest rate shall be reset at monthly intervals linked to BRLLR.

BoB was, however, silent on loans linked to the marginal cost of funds based lending rate (MCLR).

Hours after the repo rate cut last Friday, SBI had said it was passing on the entire 75-basis-point repo rate reduction to its borrowers. Consequently, EMIs on eligible home loan accounts will get cheaper by around Rs 52 per Rs1 lakh on a 30-year loan.

Bank of India (BoI) had also cut interest rate on loans linked to the external benchmark by 75 basis points. It had also trimmed MCLR by 25 basis points across tenors from one year to one month, and by 15 basis points for overnight tenor.

The move by these three banks are likely to be followed by its peers in the coming days.