State Bank of India or SBI, the country's largest lender, has withdrawn the repo-rate linked home loan scheme. The bank mentioned this on its official Twitter handle while responding to a customer's query. "Kindly note that RLLR based home loan scheme have been withdrawn. You can get the home loan migrated to MCLR based home loan," it stated. RLLR or repo-linked lending rate means that any changes in the key interest rate by the central bank are passed on directly to the customers. While MCLR or marginal cost-based lending rate is the rate to which all of bank's home loans are linked.
Kindly note that RLLR based home loan scheme have been withdrawn. You can get the home loan migrated to MCLR based home loan.— State Bank of India (@TheOfficialSBI) September 17, 2019
SBI had introduced repo-linked home loans in July this year.
Earlier this month, the Reserve Bank of India (RBI) mandated banks to link certain loans to the external benchmark based interest rate from October 1, in a bid to allow faster transmission of its rate cuts to consumers. RBI had said that banks were not satisfactorily transferring the cuts in policy rates.
The RBI has lowered the repo rate by 110 basis points so far this year. Repo rate is the interest rate at which the central bank lends money to commercial banks.
Meanwhile, state-run IDBI Bank said that the introduction of repo-linked retail loans would be effective from October 1. IDBI Bank had earlier said that it would introduce repo rate-linked home and auto loans with effect from September 10.
(With inputs from agencies)
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