Welcome Effects of Repo Rate Cut by RBI on Home, Car loans

RBI cut rates, loans to become cheaper. Repo Rate cut from 7.25% to 6.75%, the lowest in four years.

Welcome Effects of Rate Cuts:

The State Bank of India has slashed lending rate by .40% , to be effective from October 5. New Base rate = 9.30% Andhra bank has also cut rates by .25%. New Base rate = 9.75% Axis Bank Cut Base Rates by .35%. New Base rate = 9.50% Bank of India new Base rate 9.70%. Bank cut base rate by 25bps

The Flip Side

Those relying on savings will get lower income due to a fall in interest rates across the board The interest Rates on Small savings, PPF and post office deposits may be reviewed to bring these in line with the market dynamics.

What’s more after Rate cuts:

1. The RBI also announced a boost for affordable housing segment with loans to become less stringent.

2. It announced to come out with a concept paper on “less cash society”

3. To promote electronic payments and use of cards for transactions, it will put in public domain a concept paper for proliferation of card acceptance infrastructure

4. It also announced liberlisation of overseas borrowing for corporates and increased participation of foreign investors in government securities.