State Bank of India: The country’s largest bank State Bank of India (SBI) has said that it has decided to pass on the full benefit of 0.75 percent reduction in repo rate to its customers. The new interest rate will be effective from April 1, 2020. Also, SBI will follow the Reserve Bank’s declaration of relief for the loan holders. There will be a 3-month moratorium on all term loans.
SBI has said that its new reduced rate will be applicable to customers taking loans under external standard rate linked lending rate (EBR) and repo rate linked lending rate (RLLR). The lending rate linked to the external standard rate has been reduced from 7.80 percent to 7.05 percent per annum, while the RLLR has been reduced from 7.40 percent to 6.65 percent.
— State Bank of India (@TheOfficialSBI) March 27, 2020
SBI has also stated that after reducing the rate on 30-year debt linked to EBR and RLLR, the Equated Monthly Installment (EMR) will come down by Rs 52 for every Rs 1 lakh.
The Reserve Bank cut the policy rate repo by 0.75 percent in the 7th Bi-monthly Monetary Policy Review announced on Friday. This is said to be the biggest reduction in the last 15 years. It has been reduced from 5.15 percent to 4.40 percent. At the same time, the central bank has put a stop to the payment of loan installment for three months, in view of the impact on the income and economic activities of the people, in view of the 21-day lockdown (closure) to prevent the coronavirus. Is allowed
On this, SBI has said that if the loan installment is not recovered for three months, its receipt of about Rs 60,000 crore will be postponed. State Bank Chairman Rajnish Kumar said, “Our term loan figure is very large. About two to two and a half lakh crore rupees are returned on this loan every year. Thus the three-month figure would be around Rs 50,000 to 60,000 crore. ‘
In the monetary policy review announced on Friday, the Reserve Bank has agreed for a three-month moratorium on the payment of all outstanding loan installments. The central bank has said that a moratorium on the loan repayment installment can be applied for the next three months on the arrears of March 1, 2020. This suggestion has been made for all commercial banks, regional rural banks, small finance banks, and local area banks, cooperative banks and all India institutions, non-banking finance companies, housing finance companies.
Rajnish Kumar said, “Never seen such a situation before.” For 21 days before this, I have not seen a situation stopping all activities across the country. It is natural that when we are in such a strange situation, its response will also be extraordinary and beyond tradition.
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