The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India on Friday slashed the short-term lending rate, the repo rate, by 25 basis points in its fourth bi-monthly policy review. 

One basis point is a hundredth of a percentage point.

Since October 1, banks have linked their home, vehicle and SME loans to RBI’s repo rate for faster transmission of policy rate action. Most banks that have launched repo rate-linked products are likely to offer home and vehicle loans at cheaper rates to attract new borrowers.


The RBI said that while these measures are likely to help strengthen private consumption and spur private investment activity, the continuing slowdown warrants intensified efforts to restore the growth momentum.