DBT Bureau
Pune, 6 August 2025
Indian Bank expects further softening of lending rates, as the Reserve Bank of India (RBI) decided to keep the repo rate unchanged in its latest monetary policy review. The move was on expected lines, but banks like Indian Bank are already preparing for a more growth-focused lending environment.
Binod Kumar, Managing Director & CEO of Indian Bank, highlighted the bank’s proactive steps to pass on benefits to customers and hinted at further easing in borrowing costs.
“As RBI had front loaded rate cut, it was expected to maintain status quo. It is a welcome move. However, it leaves room to reconsider in coming months as CPI is benign and a push for growth may be required. At Indian Bank, we have already passed on benefits of previous rate cut and expect further normalisation in MCLR as cost of fund continue southward journey.”
This suggests that the bank is confident about continuing to lower its Marginal Cost of Funds-based Lending Rate (MCLR), making loans more affordable for individuals and businesses.
While the RBI held its repo rate unchanged to keep inflation in check, Indian Bank sees space for lending growth, especially if inflation continues to stay within comfort levels. The bank has already adjusted its rates to support borrowers and believes the trend of lower funding costs will persist.
Industry observers note that banks that are quick to pass on policy benefits stand to gain by boosting credit growth in key segments like housing, MSMEs, and retail loans.
Indian Bank’s approach signals a positive outlook for customers, especially in an environment where the economy still requires a gentle push to accelerate growth.
