SBI: Many banks have reduced interest rates on loans after the repo rate cut in the Reserve Bank of India (RBI). After this decision of banks, home loans, car loans and personal loans, customers taking are relieved. Under this, the country’s largest bank State Bank of India (SBI) has also announced a cut in interest rates of its home loan, including external benchmark based lending rate (EBLR) and repo linked lending rate (RLR).
This decision of SBI will greatly benefit the customers who have taken loans related to EBLR and RLLR, as their EMI will be reduced. However, SBI has kept the Morginal cost based lending rate (MCLR), base rate and benchmark Prime Lending Rate (BPLR).
SBI cut EBLR and RLLR
State Bank of India (SBI) uses external benchmark lending rate (EBLR) to fix interest rates for the rest of the loan, including home loans. SBI has reduced the EBLR by 25 bPS to reduce it from 9.15 percent to 8.90 percent, which will make home loans cheaper for customers. SBI had chosen the repo rate as an external benchmark for its floating rate home loan from 01 October 2019.
In addition, SBI reduced the benchmark prime lending rate (RLR) by 25 bps to decrease it from 8.75 percent to 8.50 percent. In RLLR, this decrease will reduce the cost of debt for customers taking home loans and business loans.
Decision taken in RBI meeting
In the meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), it decided to cut the repo rate. In the meeting, the members decided to reduce the repo rate from 6.50 percent to 6.25 percent. This deduction has been made for the first time in about five years as the RBI had increased the repo rate after the Kovid-19 epidemic.
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