Bank of Maharashtra Announces 25‑Basis‑Point Reduction in Retail Loan Rates
Bank of Maharashtra (BOM) announced a 25‑basis‑point cut in the interest rates it charges on retail loans, effective immediately. The reduction follows the Reserve Bank of India’s (RBI) recent repo‑rate cut to 5.25 %.
Key Details of the Rate Revision
| Loan Type | New Rate | Previous Rate | Basis Points Reduced |
|---|---|---|---|
| Home loans | 7.10 % | 7.35 % | 25 bps |
| Car loans | 7.45 % | 7.70 % | 25 bps |
BOM’s decision aligns with the RBI’s monetary policy shift and mirrors similar moves by other banks, such as Union Bank, Bank of India, and Indian Overseas Bank.
Rationale Behind the Move
- Alignment with RBI Policy – The RBI lowered the repo rate by 25 bps on 6 December 2025. BOM’s rate cut is a direct response to the central bank’s policy adjustment.
- Affordability for Borrowers – Lower interest rates reduce the cost of borrowing for consumers. BOM states the change is intended to make financing more affordable.
- Competitive Positioning – By matching the market’s new rate levels, BOM seeks to maintain its share of the retail loan segment without compromising on profitability.
Market Context
- RBI Repo Rate – Cut from 5.50 % to 5.25 %.
- Historical Home‑Loan Rates – The new rate of 7.10 % is comparable to levels seen during the COVID‑19 pandemic and the pre‑2008 financial crisis era.
- Industry Trend – Multiple banks have announced comparable reductions following the RBI’s move, indicating a sector‑wide shift toward lower borrowing costs.
Financial Snapshot of Bank of Maharashtra
| Metric | Value |
|---|---|
| Market Cap | ₹438 bn |
| Price‑to‑Earnings (P/E) | 7.19 |
| 52‑Week High | ₹61.56 (18 Nov 2025) |
| 52‑Week Low | ₹42.00 (6 Apr 2025) |
| Closing Price (4 Dec 2025) | ₹56.98 |
The rate cut is expected to influence BOM’s loan portfolio growth and could enhance its competitiveness in the retail lending arena. No immediate impact on the bank’s stock price has been reported.
