SBI cuts interest rates after RBI announcement, EMI will come down
The RBI cut repo rates, the rate at which it lends to banks; in turn, SBI announced a cut of 0.15 percent in interest rates. The new rates will be applicable from 10 August.
Following on the heels of the major reduction in the repo rates by the RBI [Reserve Bank of India], the country's largest bank SBI [State Bank of India] has announced a cut in interest rates. The State Bank announced a reduction of 0.15 percent in the interest rates on all types of loans. The new rates will be applicable from 10 August.
Home and car loan interest rates will come down. Home loan rates have already come down by 0.35 percent since April. The bank is offering home loans from July this year at an interest rate linked to the repo rate. [The repo rate is the rate at which the RBI, India's central bank, lends money to commercial banks if there is any shortfall of funds; it is a tool used by central banks to control inflation]
The Reserve Bank announced a 35 basis points [bps] cut in the repo rates. The announcement comes amid concerns of a slowdown in the economy. SBI quickly announced it would cut interest rates on loans too. As a result, the EMI on home and auto loans will come down. It is expected that other banks will also cut interest rates.
Recently, the RBI assured Finance Minister Nirmala Sitharaman that the benefit of cutting interest rates will be passed on to the customers. The 35 bps by the RBI was more than what the market expected.
RBI Governor Shaktikanta Das (Pic: PTI)
When asked about it, RBI Governor Shaktikanta Das said that the decision was not unprecedented because it was between 25 and 50 bps, which is within the normal repo rate changes. The Monetary Policy Committee of the RBI took a balanced decision, he said, and added that the repo rate has now come down to 5.40 percent from 5.75 per cent.
[Autotranslated from Hindi]