Bank of Baroda links retail interest rate to RBI Repo Rate
Launches new home loan variant to pass on transmission of rates
Mumbai. Bank of Baroda, India's second largest public sector bank, has introduced a new variant of home loan product linked to Reserve Bank of India’srepo rate.The new home loan variant will directly link interest rate to an external benchmark, which in this case is the repo rate and thereby build a direct link to ensure fair and transparent transmission of the monetary policy rate. Now, with this new variant, customers will have the option to select between MCLR linked rate, which is indexed to the bank’s cost of funds or a repo rate linked to an external benchmark.
Presently, the MCLR linked home loan product is available starting @ 8.45%, which had come into effect on 7th August after the MCLR was reduced by 15 basis points. With the new variant, home loans will also be available at repo rate linked interest rate starting @ 8.35%, thus passing on further benefit of 10 basis points to the current MCLR rated pricing.
This move is following RBI reducing the key interest rate (repo) by 35 basis points to a nine-year low of 5.40%.