SBI to offer home loan linked to repo rate

Scheme will be introduced on July 1

Home loan shoppers will have a new product to opt for come July 1. The State Bank of India will introduce a product where the interest rate is linked to the repo rate of the Reserve Bank of India.

Repo rates are benchmark rates set by the RBI and those opting for the SBI’s new home loan product will see interest rates moving instantly in sync with the repo rate. Now, the SBI’s home loan rates are linked to its marginal cost of funds based lending rate (MCLR) due to which transmission of rate cuts are slower. All banks link their retail lending rates to their MCLR rates. The SBI has also cut by 25 basis points (bps) its rates on cash credit and overdraft accounts of over ₹1 lakh linked to the repo rate.

Also, Bank of Maharashtra reduced its lending rate by 10 bps to 8.6%. The interest rate will come down for all loans having a residual maturity of more than six months, the lender said.

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Printable version | Jul 10, 2020 5:43:08 PM |

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