After the State Bank of India (SBI), the country's largest bank, the Bank of India has also given relief to the customers. Bank of India has decided to give customers the full benefit of the reduction in policy interest rates by the Reserve Bank of India (RBI).
Reduction in external benchmark lending rates
Bank of India has cut external benchmark lending rates by 75 basis points, or 0.75 percent, on Sunday. After this cut, the external benchmark lending rate has come down to 7.25 percent. The cut in interest rates by the bank will come into effect from April one.
Repo rate cut biggest in 15 years
The Reserve Bank had cut the policy rate repo by 0.75 percent in the 7th bi-monthly monetary policy review announced on Friday. This is the most significant cut in the last 15 years. It has been reduced from 5.15 percent to 4.40 percent. The central bank has also allowed banks and financial institutions to stop payment of loan installment for three months because of the impact on people's income and economic activity in view of the 21-day lockdown (bandh) to prevent the coronavirus.
MCLR also reduced
In addition, the bank has also cut the marginal cost of lending rates (MCLR). It has come down by 0.25 percent. This deduction has been made for all periods. A cut of 0.25 percent was made for a period from one year to one month, compared to 0.15 percent for the overnight period. The bank's MCLR for a year has now grown to 7.95 percent annually.
SBI gives full benefit of repo rate cut to customers
After the RBI cut the repo rate, SBI has said in a statement that its new reduced rate will be applicable to customers availing loans under the external standard rate linked debt rate (EBR) and repo rate linked debt rate (RLLR). The new interest rate will come into effect from April 2020. SBI lowered the external standard rate lending rate from 7.80 percent to 7.05 percent per annum, while RLLR was reduced from 7.40 percent to 6.65 percent.
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