RBI reduces repo rate, but EMI may take three months to come down

abstract RBI has reduced the repo rate from 4.40 per cent to four per cent.  The reverse repo rate has come down from 3.75 per cent to ...

abstract

  • RBI has reduced the repo rate from 4.40 per cent to four per cent. 
  • The reverse repo rate has come down from 3.75 per cent to 3.35. 
  • Older customers will get its benefit from at least three months later. 

Detailed

The Reserve Bank of India (RBI) has made a big announcement for the common people. According to the decision taken in the review meeting of RBI's Monetary Policy Committee (MPC), the repo rate has been reduced from 4.40 per cent to four per cent. That is, it has been cut by 40 basis points. Most of the members in the meeting were in favor of reducing the repo rate. But you know whether you will get the benefit of the reduction in the repo rate or not.  You will benefit like this, if the banks bring the benefit of cutting the repo rate to you, then the common people will benefit greatly. This is because now there will be pressure on banks to cut interest rates. With this, people will get loans cheaply. Apart from this, EMI for home, auto or other types of loans taken at floating rate will also be reduced.  Also read:  Three-month additional deferment on EMI payments, reduction in repo rate


Reduction in
reverse repo rate In addition to the repo rate, the reverse repo rate has also been cut. The reverse repo rate under the new monetary policy has come down from 3.75 per cent to 3.35. The six-member MPC meeting was chaired by RBI Governor Shaktikanta Das. RBI Governor Shaktikanta Das said that the MPC meeting was to be held from June 3 to 5. But it has already been done. This was done during 20 to 22 May.  If the

EMI
banks will be so low , if the benefits of this are passed on to the people, then the EMI of a home loan of Rs 30 lakh for a period of 20 years will be reduced by Rs 724. First, if the average rate of your loan is 7.35 per cent and EMI is Rs 23,893, then the new average rate will be 6.95 per cent and EMI will be reduced to Rs 23,169. In this way, EMI will save Rs 724.

It may take up to three months for EMI to decrease
It is known that after the introduction of the new system of interest rates by the RBI, new customers will start seeing its effect on the loan. But the old customers will get its benefit from at least three months later. This is because it can be converted into repo rate only after the reset period of the old loan is over.

Three types of benchmark rates
Banks currently have three types of external benchmark rates, according to which interest rates are decided. The method of deciding the benchmark based interest rate is not very transparent. Banks used to fix the interest rate of the loan according to the benchmark rate. But due to varying bank benchmark rates, the interest rate of loans used to vary greatly. Each bank had its own benchmark rate. 

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Today's Latest news, Know What's happening in India- with Timesnowindia.com: RBI reduces repo rate, but EMI may take three months to come down
RBI reduces repo rate, but EMI may take three months to come down
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