State Bank of India (SBI) will link the interest rates of its MSME, housing, auto and other retail loans to the repo rate from October 1. The bank has announced that it is linking the NONS with all its floating interest rates to the external benchmark repo rate.
On September 4, the Reserve Bank of India (RBI) issued a directive to all banks to link all their floating interest rate loans with frequent benchmarks. SBI said on Monday, "We have chosen the repo rate for all floating interest rate loans. The new rates will come into effect from October 1".
The Reserve Bank had asked banks to choose one of the four external benchmarks. These 4 benchmarks are-
RBI Repo Rate
3-month Treasury Bill Yield of Government of India
6-month Treasury Bill Yield of Government of India
Any other benchmark market interest rate published by Financial Benchmarks India Pvt.
Explain that SBI was the first bank to introduce repo rate based loan scheme. The bank had first announced the launch of the repo rate linked loan scheme and started it from 1 July. Only new customers were getting the benefit of this. However, the bank withdrew this arrangement a few days ago. The bank had given information about this by tweeting a customer's question. The bank wrote- Currently, the bank is only lending at the Marginal Cost of Funds based lending rate (MCLR).
The bank has issued a press release saying that some changes have been made in the scheme started on July 1 and detailed information about this will be released on the bank's website soon.
