From Oct 1, SBI floating rate loans to be repo linked

TIL Desk/Business/Mumbai/ State Bank of India on Monday said it will adopt repo rate as the external benchmark for all floating rate loans for MSME, home and retail loans, from October 1, 2019.

On September 4, the Reserve Bank of India (RBI) had mandated all banks to link all new floating rate personal or retail loans and floating rate loans to micro, small and medium enterprises (MSMEs) to an external benchmark from October 1 onwards.

“We have decided to adopt repo rate as the external benchmark for all floating rate loans for MSME, housing and retail loans effective October 1, 2019,” the bank said in a release.

The RBI gave the banks options to benchmark their floating rate loans either to repo rate, three-month or six-month treasury bills or any benchmark market interest rate published by Financial Benchmarks India Private (FBIL).