While SBI has not made any official announcement on the subject, they had removed the details of the repo rate linked home loans from their website a week ago. Yesterday, in response to a Twitter query, SBI confirmed that the scheme had been withdrawn and that all borrowers who had repo rate linked home loans could migrate to the MCLR based home loan plan.

Interestingly, SBI was the first bank to introduce the repo rate linked home loan scheme on July 01st. RBI had asked all banks to move their loans to retail customers and SME customers to an external benchmark and this product was launched in response to that order. The new order goes effective from October 01st and it is therefore surprising that SBI has withdrawn this product just 10 days before the new rule takes effect.

While SBI is not giving any reasons for the same, the assumption is that even the government and the RBI may be looking at an alternative to this external benchmarking since most banks have objected to it as being too impractical.