Experts give thumbs up to linking home loans to external benchmarks

With all banks mandated by the Reserve Bank of India (RBI) to link their retail loans to an external benchmark from October 1, interest rates on home and auto loans are expected to decline from next month. When some public sector banks (PSBs) shifted their benchmarks to the repo rate in September, their new loan offers were priced at least 20 basis points (bps) cheaper. The State Bank of India, for example, offers the lowest repo-linked home loan rate at 8.05 per cent. The bank’s home loan based on the marginal cost of funds-based lending rate (MCLR) is 30 bps higher at 8.35 per ce.....

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