The decision to cut the repo rate of the Reserve Bank of India in 25 basis points inspired many banks to offer more affordable home loans earlier this month.
Learners from major public and private sector have reduced interest rates, passed on benefits to consumers.
On 9 April, the RBI’s Monetary Policy Committee reduced the major lending rate after noticing that retail inflation remains within the 4% target range, expected to align with this target with March inflation. The repo rate is a major policy tool used by the central bank to manage inflation. Increasing the repo rate helps to curb the demand for borrowing and the supply of money.
Since most Indian banks connect their lending rates to the repo rate, the deficiency directly reduces interest rates on floating-vet loans. As a result, consumers may expect to reduce EMIs on home loans and other retail credit products. Banks often modify interest rates on different loans with each repo rate variation.
After the RBI repo rate cut, take a look at the modification of home loan interest rates by major lenders:
Following the RBI’s decision, the country’s largest lender, SBI dropped its interest rates to 0.25%. From April 15, SBI’s home loan rates will start from 8.25% per year, while 8.5% earlier.
