India’s lending landscape just shifted. With the Reserve Bank of India surprising markets by slashing the repo rate by 50 basis points, Punjab National Bank has quickly followed suit—cutting its own lending rates by the same margin, giving borrowers a reason to breathe a little easier.
From June 9, 2025, loans linked to PNB’s repo rate will become cheaper, a move that’s expected to shake up the competitive dynamics among India’s public sector lenders. Home loans from PNB will now start at 7.45%, while vehicle loans will begin from 7.80%.
RBI’s Move Sends Shockwaves Through Banking Sector
In a move that caught analysts off-guard, the RBI on June 6 slashed the repo rate from 6.00% to 5.50%. That’s the sharpest cut since the pandemic-induced easing in 2020.
Two things happened: repo rate fell, and the CRR was cut by 100 bps to 3%. That alone pumped over ₹2.5 lakh crore into the system.
It wasn’t just a technical monetary policy shift. It was a clear message—growth matters more right now.
The central bank’s governor, Sanjay Malhotra, called it a “course correction” to support borrowing and revive consumption. That’s jargon for: we need people to spend more, and banks to lend more.
PNB’s Quick Response: Cheaper Loans Ahead
PNB wasted no time. Just hours after the RBI announcement, the bank posted on X (formerly Twitter), confirming its 50-basis-point reduction in its Repo Linked Lending Rate.
And just like that, a lot of loan calculations changed.
In plain numbers:
PNB home loans: Now starting from 7.45% per annum
Vehicle loans: Starting from 7.80%
Lower EMIs: Effective June 9, 2025
This puts PNB in a sweet spot. At least temporarily, it’s ahead of competitors like SBI and Bank of Baroda—unless they react just as swiftly.
What It Means for You and Me
Let’s get real—this isn’t just about rates and percentages. It’s about monthly budgets and loan eligibility.
If you’re a salaried professional planning to buy a house, this rate cut is gold. Same for small business owners hoping for a vehicle loan, or someone waiting to refinance a personal loan.
There’s another side too. Those with existing repo-linked loans will also see their EMIs drop. It’s automatic. No need to call or visit the branch.
For anyone who’s been sitting on the fence about taking a loan, this is as close to a green light as it gets.
Real Estate Gets a Breather—Finally
The slowdown in residential real estate was becoming too loud to ignore. Rising prices were pushing homes out of reach, especially in the affordable segment.
According to Amit Bhagat, CEO of ASK Property Fund, this repo rate cut “strengthens homebuyer confidence.” He says a cumulative 1% cut in six months will help middle-income families the most.
That’s important. Because sentiment in housing isn’t just about money—it’s emotional. Buying a house in India is still a big dream. And lower EMIs mean more dreams could turn into homes.
Comparing Lending Rates: PNB vs Rivals
Here’s how PNB stacks up against some of the other major banks post-cut:
| Bank | Home Loan Rate (Starting) | Car Loan Rate (Starting) |
|---|---|---|
| PNB | 7.45% | 7.80% |
| SBI (pre-cut) | 7.65% | 8.00% |
| Bank of Baroda | 7.60% | 7.95% |
| HDFC Bank | 7.75% | 8.10% |
Notice the edge? But this could change fast if others follow.
Experts Predict More Cuts Ahead
Market experts aren’t ruling out another rate cut this year. With inflation easing and growth forecasts unchanged at 6.5% for FY26, the RBI still has room to work with.
Some even think this could spark a rate war.
SBI, BoB, Canara Bank, HDFC—eyes are now on them. If they respond aggressively, borrowers may see another dip in EMIs before the year ends.
One analyst from ICRA noted, “It’s not about whether more banks will follow. It’s about who blinks next, and how low they’re willing to go.”
PNB’s Bigger Bet: Volume Over Margin?
Let’s not pretend this is charity. PNB’s decision is strategic.
With liquidity high and credit demand still soft in some sectors, lower rates can bring more borrowers into the system. It’s a volume game now.
Margins might shrink, but the hope is loan books will grow. MSMEs, retail borrowers, and housing finance segments could become the new focus areas.
There’s also competitive pressure. SBI is always lurking. BoB is rebuilding. And private players aren’t sitting still either.
This isn’t just a rate cut. It’s PNB saying: “We’re still in the fight.”
