Basis point

One hundredth of a percentage point, or 0.01%. Rates, yields and spreads move in small steps, and basis points avoid the confusion between a change in percentage points and a percentage change.

A repo rate cut from 6.50% to 6.25% is a cut of 25 basis points. Described as a percentage, it would be a 3.8% cut in the rate, which is a different statement. On a ₹500 crore floating-rate loan, 25 basis points is ₹1.25 crore of interest a year.

Basis points are used for anything quoted as a rate. Bond yields and credit spreads are quoted in them. So are bank margins and fund expense ratios, and so are changes in a company's operating margin. A margin that went from 18.0% to 18.5% expanded by 50 basis points, not by 0.5%.

Say basis points when you mean points.