The banks that have cut interest rates include Punjab National Bank, Bank of India, Indian Bank and UCO Bank. This decision of the banks will benefit both their existing and new borrowers.
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Four public sector banks announced a reduction in lending rates by up to 0.25 percent within hours of the repo rate cut on Wednesday. The banks that cut interest rates include Punjab National Bank, Bank of India, Indian Bank and UCO Bank. This decision of the banks will benefit both their existing and new borrowers. Similar announcements are expected from other banks soon.
Let us tell you that RBI had announced a reduction of 0.25 percent in the key policy rate repo to 6.0 percent. These public sector banks said in separate information given to the stock markets that this revision in the loan rate has been done after the Reserve Bank of India cut the short-term loan rate (repo rate).
Why do banks make loans cheaper due to reduction in repo rate
With the reduction in repo rate, banks will get money from RBI at cheaper rates, due to which they can reduce interest rates on home loans, car loans, personal loans etc. This will reduce EMI and increase monthly savings of people. Small businessmen and entrepreneurs will also get cheap loans, which can increase investment and employment opportunities.
When are the reduced rates effective
According to PTI, Chennai-based Indian Bank said that its repo-linked standard lending rate (RBLR) will be reduced by 35 basis points to 8.70 percent from April 11. Meanwhile, Punjab National Bank (PNB) has revised the RBLR from 9.10 percent to 8.85 percent from Thursday.
