InvestorQ : Why has SBI chosen to hike home loan rates when the repo rates are being cut by the RBI?
vidhya Laxmi made post

Why has SBI chosen to hike home loan rates when the repo rates are being cut by the RBI?

Answer
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4 months ago


SBI’s decision to hike its effective home loan rate by 20 basis points (0.20%) for new borrowers did come as a surprise. However, this was done by widening the spread over its repo benchmark. Interestingly, this move comes at a time when bank has reduced its marginal cost of funds-based lending rate (MCLR) across tenures by 15 bps. In the immediate aftermath of the March monetary policy, SBI had slashed its repo-linked external benchmark rate (EBR) by 75 basis points. The net impact will around 20 bps because the minimum effective rate for loans up to Rs.30 lakhs will now be 7.4% against 7.2% earlier.