subject: Rbi Rate Cut Announcement [print this page] Rate cut announced by RBI in its annual monetary policy for 2012-2013 is the first one in the last three years. Really this is good news for customers. The fund may come down for banks.But Reserve bank of India cut the rate by 0.50 percentage basic points from 8.5 percentage to 8.0 percentage but no change in Cash Reserve Ratio(CRR) which remains at 4.75 percent.The cut in the repo rate is an indication that banks could reduce the internel rate on car loans,home loan,
personal loans.
The rate cut was declared by RBI on 17/08/2012. Bank may reduce the rate of interest depends on their profit margin on due course of time.The State Bank of India immediately reduced the rate of interest announced by Reserve bank of India which
would substantially cut the lending rates that would be benefited to auto, home and personal loan borrowers.
However, it may not be a good news for depositors,who will earn lesser interest on their deposits.
Banks also look their own profit margin. This New policy may be benefitted to the borrowers when banks reduce the rate of interest on the declaration from Reserve Bank of India.we hope the public sector banks will start reduce the interest rate then followed by others. substantially the reduction rate will be from .25 percent to .50 percent.
If banks reduce the interest rate, how it would be effect to the borrowers, (eg) if a customer has a existing home loan of 10 lac, then the EMI will be around Rs.10153/- when the rate of interest is 10.75 percent for a period of 240 months. If bank reduce the rate of interest from 10.75 percent to 10.25 percent your EMI will be reduced to Rs.9817/- only. The difference of Rupees three hundred and thirty six can be saved every month, Rupees four thousand thirty two only can be saved per annum Rupee eighty thousand six hundred and forty. can be saved for the whole term(240 months). Ultimately you can enjoy the benefit when banks reduce the interest rate.
after 13 times rate hiking between March 2010 and October 2011 realy this is good news for customers.If did not reduce rate of interest some banks. if unfortunately your bank was not cut rate of interest for home loan ,you can switch over balance transfar option with some other banks. another good news for home loan customer. Now some of banks not collected pre close charges and part payment charges.
