State Bank of India (SBI), India’s largest lender, said it will introduce a repo-linked home loan product from July 1, 2019.

The bank also reduced the interest rate on Cash Credit and Overdraft (Limits above Rs 1 lakh) with effect from July 1, 2019, after the monetary policy committee (MPC) of the Reserve Bank of India (RBI) cut benchmark repo rate by 25 basis points to 5.75 percent.

Now, the effective repo linked lending rate (RLLR) for Cash Credit and Overdraft customers is 8 percent.

Currently, under the MCLR regime, banks reset interest rates for home loans every 3, 6 or 12 months, as per the contract. So far, RBI has brought down repo rates by 75 bps in the last three policies, but banks have only transmitted about 21 bps.

First Published:Jun 7, 2019 8:11 PM IST