SBI cuts down base rate on home loans
Posted on: 29/Sep/2017 3:09:07 PM
Recently, Andhra Bank and Bank of Baroda had slashed down the base rate of home loans. Now, following the same steps, the largest lender in India – State Bank of India has also reduced base rate from 9 percent to 8.95 percent with effect from 1st October. This announcement has come prior to Reserve Bank of India’s monetary policy announcement.
On Thursday, Andhra Bank and Bank of Baroda have brought down the base rate from the earlier 9.70 percent to 9.55 percent, and from 9.50 percent to 9.15 percent respectively. This again will come to effect from October beginning.
All the existing home loan borrowers who have obtained the loan before 1st April 2016 shall get benefited out of this, because the home loan rates were linked to the former bank base rates.
A lot of home loan borrowers have not made transition of base rate to marginal cost based lending rate. It is a benchmark lending rate system launched in April 2016. All the new borrowers joining thereafter shall get it at this rate.
Base rate is set by RBI. It is the minimum rate at which loans are lend to customers. Recently, the public sector lender, the Punjab National Bank had also cut the base rate by 0.20 percent and brought it down to 9.15 percent.
