IDBI Bank customers alert! Your auto, home loans to become cheaper from this date, here is why

State-run IDBI Bank on Monday announced the introduction of Repo-linked retail loans would be effective from October 1, this year. IDBI Bank had earlier said it would introduce Repo Rate-linked home and auto loan with effect from September 10. However, in view of RBI directive issued on September 4, to link all new floating rate retail loans (personal segments) to external benchmark with effect from October 1, the introduction of Repo-linked home loan and auto loan has been deferred, it said.

"IDBI Bank on August 30, 2019 had announced that it would introduce Repo Rate-linked Home and Auto Loan with effect from September 10, 2019. However, in view of RBI directive issued on September 4, 2019, to link all new floating rate retail loans (Personal segments) to external benchmark with effect from October 1, 2019, the introduction of Repo linked Home Loan and Auto Loan has been deferred", it said in a statement .

Earlier, State Bank of India or SBI has also reduced its MCLR (Marginal Cost of Funds based Lending Rate) by 10 basis points. This will come into effect from September 10. The one-year SBI MCLR will be 8.15% per annum with effect from 10 September. This is the fifth consecutive reduction in MCLR from SBI so far in FY 2019-20.

Other banks are likely to follow SBI's lead and could lower their MCLR rates. SBI also lowered its fixed deposit or FD rates by 20-25 basis points. On September 4, RBI mandated banks to link fresh retail loans to external benchmark. The move is aimed at including fresh retail, MSME loans from October 1 where home, auto loans will get cheaper.