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

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  • 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. 

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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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Banking

Public sector banks sanctioned 5.95 lakh crore loans for various sectors in two months

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Public sector banks owed loans of Rs 5.95 lakh crore for the last two months to various sectors including MSME (micro, small and medium enterprises), retail, agriculture and corporate affected due to the corona virus epidemic and the ongoing lockdown for its prevention. Approved. 

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At the same time, Non-Banking Financial Companies (NBFCs) were funded from these banks from March 1 to May 8 with an amount of Rs 1.18 lakh crore.  Finance Minister Nirmala Sitharaman tweeted on Tuesday that, ‘Public sector banks (PSBs) have approved lending of Rs 5.85 lakh crore to 46.74 lakh account holders of MSME, retail, agriculture and corporate sector from March 1 to May 8, 2020. . Whereas during this period, Rs 1.18 lakh crore was made available to NBFCs.  10% additional loan based on working capital limit

With the lockdown commencing from 25 March in the country, PSB introduced a 10 per cent additional loan facility based on the working capital limit. Under this, the maximum limit was fixed at Rs 200 crore. In another tweet, Sitharaman said that, ‘From March 20 to May 8, PSB approached 97 per cent of the eligible borrowers for emergency lending facility and enhanced working capital limit and they were given loans worth Rs 65,879 crore.’ 

Lockdown till May 17 The
central government first announced a nationwide shutdown of 25 days from March 25 for the prevention of corona virus. Thereafter a second phase lockdown was imposed from 15 April to 3 May. In the third phase, the lockdown has been extended from May 4 to May 17 with some relaxation.
 

PSBs sanctioned loans worth Rs 5.95 lakh crore for more than 46.74 lakh accounts from the MSME, Retail, Agriculture & Corporate sectors between March 1 and May 8, 2020. Total financing worth Rs 1.18 lakh crore was provided to NBFCs. @FinMinIndia @DFS_India @RBI @PIB_India

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Good news: After SBI, now these banks also made loans cheaper, you will benefit..

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Union Bank of India and PNB Housing Finance have also given relief to customers following the announcement of a cut in the Marginal Cost of Fund Based Interest Rate (MCLR) by the country’s largest state-run State Bank of India (SBI).  Union Bank of India has reduced this so Union Bank of India has reduced the Marginal Cost of Funds (MCLR) based lending rate by five to 15 basis points for all periods. This is the 11th consecutive cut in the rate announced by the bank since July 2019. The new rates will be effective from 11 May 2020.
 

Period  MCLR 
Overnight MCLR 7.15%
1 month MCLR 7.15%
3 month MCLR 7.40%
6 month MCLR 7.55%
1 year MCLR 7.70%

PNB Housing Finance, being implemented from today, has announced a new rate home
loan company PNB Housing Finance has reduced the loan rates for existing customers by 0.15 per cent. This deduction will be for both personal housing loans and property-acquired loans. The loan rate cut has come into effect from 9 May. 

The bank said in a statement that the deduction will be available to all existing retail customers who have taken loans at floating rate before February 2020. PNB Housing Finance Managing Director and CEO Neeraj Vyas said, ‘We have taken this step to provide relief to customers during the current Kovid-19 crisis. This will also help in growth in the housing sector. This will benefit 2.35 lakh customers, irrespective of the principal amount of their loan. The company provides housing and non-housing loans to its retail customers. Apart from this, the company also lends construction to real estate developers.


SBI had
first lowered the loan. Earlier on May 7, SBI also announced a reduction in MCLR. After the cut, the one-year MCLR has come down from 7.40 per cent to 7.25 per cent. It was reduced by 15 basis points, which would greatly benefit the customers. The new rates will be applicable from 10 May 2020. 

Customers will 
know that SBI has cut MCLR for the 12th consecutive time in the current financial year. This will greatly benefit the customers. This is because the EMI of their home loan will decrease. However if your home loan is linked to SBI’s MCLR rate, the new deduction may not bring your EMI down immediately, as MCLR based loans usually have a one-year reset clause. Explain that MCLR rates are based on the bank’s own cost. 

Home loan will be so cheap
In this context, SBI said that if you have taken a loan of Rs 25 lakh for a period of 30 years, which is MCLR based, the EMI of your home loan will be reduced by about Rs 255.
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Banking

Corona virus crisis will increase transactions through credit cards

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The challenging situation caused by the coronavirus epidemic will increase transactions through credit cards. 

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The challenging situation caused by the coronavirus epidemic will increase transactions through credit cards. A senior SBI Cards official said that now that it has become necessary to live indoors, people will spend to improve the interior of the house.  Hardayal Prasad, managing director and chief executive officer of SBI Cards, said, “It is too early to say anything about how the credit card industry is growing.” I have always been a supporter of digital transactions. Whatever may be the economic situation, I think the transaction through credit card will increase continuously. ‘  There will be more boost from demonetization


Prasad said, ‘The credit card industry was given a boost after demonetization. I think the coronavirus epidemic is going to be bigger than demonetization. After demonetization, cash transactions were replaced by digital. If we get even 5% of that, that will be important. So, we are looking at that. The cash you spend can actually be through the card. Now if you stay at home for a long time and are not going out, you will probably want to make your home better. ‘ 

Prasad said that if people live in homes, they would like better products. He may want to get a big television, a big freeze because he is not going to eat outside and will cook at home. We are looking at this type of trend. People will feel that now our home is an office, it should be made better. In such a situation, they would like to make their home better. 

Expenses through cards will be less for entertainment
Prasad said that expenses will be reduced through cards for things like travel, hotels, summer vacation, cinema, and entertainment. Things are expected to be normal by October, so the business is going to be a bit challenging. He said, ‘During that time there will be festivals. The festival is important in terms of expenditure in the country. However, it is also true that 60 to 80 percent of the business is done in summer which will not happen this year. 

Things will improve during the New Year, 
however, Prasad expressed confidence that things will improve during the festivals and New Year in terms of expenditure. SBI Card is also looking at co-branded cards. The company has a co-branded card with Apollo Hospital. Through this, people can buy medicine online with advice from doctors. 

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