Anand & Associates

05/10/2019

04/10/2019

There is good news for those looking at taking a new loan as the Reserve Bank of India (RBI) announced yet another repo rate cut. For the fifth consecutive time this calendar year, the central bank cut the repo rate by 25 bps and the reverse repo by 25 bps (100 bps = 1 per cent).

This cut is sweeter for new borrowers as banks are supposed to link all new floating rate loans to any of the four external benchmarks specified by RBI from October 1. External benchmark linked loans are supposed to make transmission of RBI's rate cuts down to the borrower faster.

After this announcement, the repo rate stands at 5.15 per cent and reverse repo rate at 4.90 per cent. In total, the RBI has cut rate by 135 bps starting from February 2019 till today in five successive steps.