Punjab National Bank
Punjab National Bank(PNB) and Allahabad Bank have launched retail loan product that is linked to the Reserve Bank of India’s (RBI) repo rate. Linking of the loan with repo- rate will make them cheaper.
Effective from August 27, the interest rate under Punjab National Bank’s PNB Advantage scheme will be 0.25% less than the existing rates based on marginal cost of funds-based lending rate (MCLR). Existing customers can also apply for new repo linked lending rates(RLLR) with minimal charges.
In a statement, PNB said, “The new rates will vary from 8.25% to 8.35% for housing loan borrowers and 8.65% for car loan borrowers.”
Allahabad Bank
Allahabad Bank has benchmarked its loans up to Rs75 lakh with the external benchmark linked rate (EBLR) with repo rate one of its constituents. The bank has priced its home loans up to Rs75 lakh and mudra loans sanctioned with effect from 1 September 2019 with reference to EBLR.
It has also reduced the MCLR for the one-year loan to 8.60% from 8.65 % which is effective from May of this year. Therefore, the Reserve Bank of India has cut its repo rate four times this year
Many banks including SBI has linked their repo rates with lending rates. The repo rate is the rate at which the RBI lends money to other banks.
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