State-owned Oriental Bank of Commerce on Tuesday said customers can now avail home and vehicle loans at repo-linked interest rates starting from 8.35 percent and 8.70 percent, respectively.
OBC has launched new variant of home loan and vehicle loan products linked to the Reserve Bank of India's repo rate, the bank said in a release.
“Customers will have the option to select between MCLR linked rate, which is indexed to the bank's cost of funds or a repo rate linked to the external benchmark,” the lender said. “With the new variant, home loans and vehicle loans will also be available at repo rate linked interest rate starting at 8.35 percent and 8.70 percent, respectively, thus passing on further benefit of 20 basis points and 25 basis points respectively to the current MCLR rated pricing.”
The new home loan and vehicle loan products will directly link interest rate to an external benchmark, which in this case is the repo rate and thereby build a direct link to ensure fair and transparent transmission of the monetary policy rate immediately to the customers, the Gurugram-headquartered lender said.
The decision comes in the backdrop of Reserve Bank of India Governor Shaktikanta Das asking banks on Monday to link their loan as well as deposit rates to the repo, the rate at which the apex bank lends short term money to the banks.
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