Bank of India Is On the Move

As India’s financial landscape continues to evolve amid changing economic winds, one public sector bank is making bold, calculated moves to stay ahead of the curve. Bank of India (BoI), a venerable institution with roots tracing back to 1906, has recently made a series of bold initiatives, under its MD & CEO Rajneesh Karnatak, that signal both agility and ambition. From interest rate adjustments and product innovation to infrastructure growth and strategic alliances, BoI is charting a dynamic path through 2025. Here’s a comprehensive look at the bank’s latest developments and what they mean for consumers, investors, and the broader economy.

In response to the Reserve Bank of India’s (RBI) recent 25 basis point cut in the repo rate, bringing it down to 6%, Bank of India promptly reduced its home loan interest rates by the same margin. The new rate of 7.90% per annum, down from 8.10%, came into effect on April 15, 2025.

This move offers a welcome reprieve to homebuyers and reflects the bank’s responsiveness to macroeconomic cues. Floating-rate borrowers will especially feel the benefit, as the drop in EMIs, estimated at Rs 900 per month for a Rs 50 lakh loan of 30 years tenure, makes home ownership slightly more affordable. 

BoI’s alignment with the RBI's monetary easing also hints at the bank’s intent to spur consumer spending and revive its real estate sector business. However, interest rates still depend on the borrower’s CIBIL score, ensuring that credit discipline remains a cornerstone of BoI's lending policy.

While borrowers rejoice, depositors inevitably are seeing a recalibration of returns. In sync with the repo rate cut, BoI has also slashed its fixed deposit (FD) interest rates and discontinued its special 400-day FD scheme that previously offered up to 7.30%.

Effective April 15, 2025, depositors can expect revised rates such as, 7.05% for one-year deposits, 6.75% for deposits above one year up to two years, 5.75% for 180 days to less than 1 year, and 4.25% for 91-179 day deposits.

Larger deposits of Rs 3 crore to less than Rs 10 crore will fetch between 5.75% and 6.50%, depending on tenure. Notably, the bank continues to honor its commitment to senior citizens, offering an additional 0.50%, and 0.65% for super senior citizens.

These revisions signal a broader trend of easing deposit returns, but BoI’s calibrated tiered approach ensures competitive rates across customer segments, even while its keeps its commitment to the regulatory framework and the interests of its shareholders.

Despite the tightening interest rate margins, BoI reported robust growth in its Q4 FY2025 business update - a proof of its sound fundamentals and operational efficiency. Key highlights included its global business which was up by 11.95% YoY to Rs 14.81 lakh crore, and its global deposits which rose 10.65% to Rs 8.16 lakh crore.

Bank of India’s domestic deposits hit Rs 7 lakh crore, up from Rs 6.8 lakh crore last quarter, while its global gross advances rose 13.59% to Rs. 6.65 lakh crore. Its domestic gross advances also increased 14.28% to Rs 5.62 lakh crore.

These figures underscore the bank’s expanding role in both retail and corporate credit sectors. Investors took note too with BoI's share price surging after this announcement.

In a major push for customer reach and financial inclusion, BoI recently opened 111 new branches nationwide. This expansion includes significant growth in metros and semi-urban centers alike, reflecting a hybrid strategy aimed at increasing market penetration.

Some of the key branch expansions include 17 new branches in Hyderabad FGMO, 14 new branches in Chennai, 13 in Pune, 12 in New Delhi, 11 in Bhopal and 10 each in Chandigarh and Lucknow.

This aggressive scaling demonstrates the importance of BoI’s brick-and-mortar strategy despite a seemingly digitizing world. As MD & CEO Rajneesh Karnatak stated, “We aim to enhance accessibility and provide a more personalized banking experience, supporting small businesses and empowering individuals.”

BoI has been actively tapping capital markets to fund India’s developmental needs. In a recent infrastructure bond issuance in FY2025, the bank raised Rs 2,690 crore via 10-year infra bonds at 7.50%. The issue attracted a staggering 94 bids totaling Rs 8,845 crore, nearly 6 times the base size, highlighting investor confidence in the bank’s stability and vision. 

Of these, 26 bids were accepted, locking in the funds at a competitive coupon rate. These long-term funds are earmarked for infrastructure projects and affordable housing, two pillars critical to India’s economic agenda. 

In recent quarters, BoI has raised Rs 12,500 crore through various bonds, including Rs 2,500 crore in Basel III Tier-II bonds (in September), Rs 5,000 crore in infra bonds (in July), and Rs 5,000 crore in infra bonds (in November). Such proactive fundraising positions the bank as a reliable financing partner for the nation’s infrastructure ambitions.

In a strategic move that enhances its product portfolio, BoI has entered into a bancassurance partnership with The New India Assurance Company Ltd. (NIACL). This tie-up enables BoI customers to access a wide array of general insurance products, ranging from health and motor to home and commercial policies, directly through its branches and digital channels.

"With this alliance, we're bringing comprehensive insurance solutions under one roof,” said BoI MD & CEO Rajneesh Karnatak. NIACL CMD Girija Subramanian echoed this sentiment, highlighting how the its partnership with a leading bank like BoI will help deepen insurance penetration and deliver value-added services.

The move leverages BoI’s 5,200+ branch network and NIACL’s century-old insurance legacy, creating a potent combination to meet the evolving needs of customers.

In an era where public sector banks are often perceived as conservative, Bank of India is emerging as a fast mover. Whether it's adapting interest rates swiftly to monetary policy changes, reporting strong growth across deposits and advances, or forging meaningful partnerships to broaden its service offerings, BoI is writing a new chapter in its storied legacy.

Its bold expansion into physical infrastructure, supported by strong capital market activity and customer-centric policies, reveals a bank that is not only responding to the present but also preparing for the future. 

With a strategic mix of technology, human touch, and financial prudence, BoI appears well-positioned to navigate the complexities of India’s economic journey ahead.

For its investors, its customers, and the banking industry at large, Bank of India’s recent strides underscore one clear message: the bank isn’t just keeping up, but leading from the front.