INSUBCONTINENT EXCLUSIVE:
SBI loan: SBI said a premium of 15 basis points will be added to card rate for non-salaried borrowers.
State Bank of India (SBI), the country's largest bank, recently said that it would adopt the repo rate as external benchmark for all its
floating rate-based loans from October 1
The change will impact floating rate loans for small businesses, home and retail loans, the bank said in a statement
Repo rate is the interest rate at which the Reserve Bank of India (RBI) lends short-term funds to commercial banks
Adopting repo rate as extermal benchmark would mean that any changes in the key interest rate by the central bank would be passed on
directly to the customers
Here are 10 things to know about SBI's latest announcement on loans:Under the new rule, SBI will charge a premium of 15 basis
points for home loans up to Rs 30 lakh for salaried class borrowers
That means the effective home loan rate will be 8.20 per cent, according to bank's website- sbi.co.in.For home loans between Rs 30 lakh
and Rs 75 lakh for salaried class, 40 basis points of premium will be changed
That means the effective rate will be 8.45 per cent.SBI said a premium of 15 basis points will be added to the card rate for non-salaried
borrowers in case of home loans, according to SBI.A concession of 5 basis points on home loan rates will be given to woman borrowers, the
bank said.The lender said it has voluntarily decided to extend the external benchmark-based lending to medium enterprises also, in order to
boost lending to the MSME (Ministry of Micro, Small and Medium Enterprises) sector.The Reserve Bank of India (RBI) has time and again urged
banks to transmit the benefit of lower interest rates to the consumer. Earlier this month, the central bank mandated banks to link certain
loans to the external benchmark based interest rate from October 1, in a bid to allow faster transmission of its rate cuts to
consumers. SBI - which had introduced floating rate-based home loans from July 1, 2019 - said it has made some modifications in the scheme
effective October 1, 2019, to comply with the latest regulatory guidelines. RBI has reduced the repo rate by a total 110 basis points (1.1
percentage point) in four consecutive bi-monthly reviews so far this year.The RBI will announce the next monetary policy for 2019-20 on
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