SBI claims new repo-linked home loan 'cheapest' at 8.05%: How it works
In July, SBI was the first bank to introduce home loan rate linked to RBI's repo rate
Under the new home loan product from SBI, the interest rate changes automatically from the next month of RBI's repo rate cut/increase
India's biggest bank SBI or State Bank of India became the first bank to offer a home loan product where the interest rate was linked to RBI's lending rate, repo rate. This new home loan product was launched by SBI in July. Earlier, from May, SBI had linked large savings account (balance above ₹1 lakh) and all cash credit and overdraft accounts with limits above ₹1 lakh to the repo rate. After SBI, some other banks like Oriental Bank of Commerce (OBC) and Bank of Baroda have come up with new home products, linking them to RBI's repo rates. Recently, Reserve Bank of India chief Shaktikanta Das urged banks to link their loans and deposits pricing to the repo rate for better transmission of interest rates across the banking sector. More banks are likely to follow SBI in launching repo rate linked products.