The Reserve Bank of India's Monetary Policy Committee voted 4-2 to cut the benchmark repo rate by 25 basis points to 6% — the second consecutive cut in 2025 — in a bid to stimulate economic growth.
The RBI governor said the rate cut was driven by declining inflation, which came in at 3.8% in the last quarter, comfortably below the 4% target.
For borrowers, the rate cut is expected to translate into approximately ₹800 per month reduction in EMI on a ₹50 lakh home loan with a 20-year tenure, subject to banks passing on the full benefit.
The stock market responded positively, with the BSE Sensex gaining 1,240 points and the Nifty 50 crossing the 24,000 mark for the first time.
Tamil Nadu Housing Board announced it would pass on the full rate benefit immediately for all its home loans.