SBI slashes home loan rates; new product to sync with repo rate
After linking its short-term loans and large savings deposits rates to the repo rate, the largest lender State Bank on Friday (June 7) said it will introduce repo-linked home loans from July.
The lender has also reduced interest rate on cash credit account (CC) and overdraft (OD) customers with limits above ₹1 lakh, after the RBI reduced the repo rate by 25 basis points on Thursday (June 6). “We will introduce repo-linked home loans from July 1,” SBI said in a late evening statement.
The monetary policy committee had unanimously decided to reduced repo rate by 25 basis points to 5.75 percent in the second bi-monthly policy on Thursday (June 6), taking it down to a nine-year low, citing sagging growth and to cushion the rising headwinds to the economy. It was the third consecutive repo rate cut by RBI, with cumulative reduction of 75 basis points in 2019, so far.
“The benefit of reduction in the repo rate by 25 bps has been passed in its entirety to our CC/OD customers (limits above ₹1 lakh), with effect from July 1,” SBI said. The effective repo-linked lending rate (RLLR) for CC/OD customers is 8 per cent now, it said, while for savings deposits above ₹1 lakh the new rate would be 3 per cent.
In March, the bank had linked all CC accounts and ODs with limits above ₹1 lakh to the repo rate plus a spread of 2.25 percent. For above ₹1 lakh, it had set its savings deposit rates to 2.75 percent below the repo rate.