The Reserve Bank of India (RBI) announced the outcome of its bi-monthly Monetary Policy rates on October 9 and said that it has decided to keep the repo rate unchanged at 4 per cent and the reverse repo rate at 3.35 per cent and would continue with its accommodative stance.
The Reserve Bank of India (RBI) announced the outcome of its bi-monthly Monetary Policy rates on October 9 and said that it has decided to keep the repo rate unchanged at 4 per cent and the reverse repo rate at 3.35 per cent and would continue with its accommodative stance.
RBI also said it has decided to rationalise the risk weights and link them to loan-to-value ratio for all new housing loans sanctioned up to March 31, 2022. This is against the usual practice of differential risk weights based on the size of the loan as well as the loan-to-value ratio. This announcement will definitely encourage banks to lend more to individual homebuyers without feeling the stress on their balance sheets, said a realty analyst. RBI also believes the measure is expected to give a fillip to the real estate sector, which is one of the biggest generators of employment and economic activity.
Borrowers paying EMIs on their floating interest rate loans have nothing to cheer about as the repo rate is constant. However, the borrowers may expect some relief from the earlier cuts by the RBI as several banks have reduced their MCLR and repo linked lending rates in the recent past. If you are a borrower with a loan linked to Marginal Cost of Funds based Lending Rate (MCLR), the fall in MCLR will help you pay lower EMIs on your loan as and when your reset-period comes up.
Loans, including home and vehicle loans, offered by banks are linked to an external benchmark, which for most banks is the RBI repo rate since October 1, 2019. Currently, the home loan interest rates for new borrowers start from as low as 6.7 per cent, however, for the majority of borrowers based on the loan amount, profession, gender etc, it is 7 per cent or even higher.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "RBI")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}