Mumbai, Feb. 7 -- The Reserve Bank of India's (RBI) monetary policy committee on Friday delivered a much-anticipated rate cut of 25 basis points, taking the policy repo rate to 6.25%. The first rate cut in five years, the Monetary Policy Committee's decision will lead to lower equated monthly instalments or EMIs by retail borrowers by an equivalent amount, provided their rates are linked to the repo. Repo rate is the interest rate at which commercial banks borrow from the RBI.

Mint takes a look at what this means for thousands of retail borrowers.

At present, retail and small business loans are linked to external benchmarks, and corporate loans are still on the marginal cost of fund-based lending rate or MCLR. EBLR refers to external be...