“It will be effective from September 1, 2019 for the ensuing festival season. Presently, it will be for new customers only and in due course it will be extended to existing customers as well,” it said in a statement.
The bank has already linked the housing loan interest rate with repo rate, it added.
Through linking of repo rate to retail loans, the bank is passing interest rate benefits directly to the customers and it will make the retail loans cheaper, it said.
Announcing a slew of measures to boost growth, Finance Minister Nirmala Sitharaman on Friday said that banks will launch repo rate and external benchmark-linked loan products that will lead to reduced EMIs for housing, vehicle and other retail loans.
Meanwhile, in another statement, BoM said recently 18 public sector banks had come together in Pune as part of the second round of the ideation exercise to further streamline the banking sector as part of the government’s efforts to make India a USD 5-trillion economy in five years.
The inter-bank meeting, held under the aegis of the State Level Bankers’ Committee (SLBC), was organised by BoM, convenor, SLBC, Maharashtra State.
A S Rajeev, managing director and CEO of BoM, said the first stage of the bottom- up consultation process designed to generate ideas and review performance of banks and their alignment with national priorities was conducted on August 17 and 18.
This was a first of its kind consultation, where the branches were asked to review their performance, deliberate on the issues before the banking sector and suggest future strategies for the economy to reach USD 5 trillion by 2024-25.
The consultations during the two days generated a number of implementable and innovative suggestions, which will be collated and presented during the national level consultation meet, the statement added.