On lines of SBI, these PSUs to offer repo rate linked home, auto consumer loans soon
To address this complaint of customers, many government banks have now decided to offer repo rate linked products, in which the rate of interest will be on lines of RBI's rate cut.
Banking customers or the account holders often complain that the EMI's of the banks remains same even after Reserve Bank cuts the interest rates. To address this complaint of customers, many government banks have now decided to offer repo rate linked products, in which the rate of interest will be on lines of RBI's rate cut. After linking home loans with RBI Repo rate by the country's largest bank State Bank of India, many PSU banks are all set to follow the same path.
Syndicate Bank, Bank of India, Union Bank of India and Allahabad Bank will also bring repo rate linked products. Its benefit will be available to the borrowers on the products related to the repo rate, as the bank rates do not reduce interest rates immediately in case of MCLR linked loans. Syndicate Bank has announced that the repo rate will be linked on savings bank deposits of more than Rs 25 lakh and the customers will be able to take new home, consumer and auto loans on the same lines.
SBI linked the long-term home loans to repo rates in June this year. The bank is offering its old customers to shift on the repo rate without any additional charge. The RBI has reduced interest rates by 1.10% so far this year, while the banks have only given a benefit of 0.5% to customers.
Although the repo rate linked product will not always benefit the customers, as the EMI will be increased as the repo rate increases. However, experts believe that the rate cut may continue in the coming days and the pressure on private banks will also get increased.