RBI delivers sharp Repo Rate Cut, Affects Interest rates to Reduce

RBI reduced the repo rate by 50 basis points in June. Now the repo rate is at 5.50% reduced from previous 6.00% in April. Changed its policy stance on accommodative to neutral.

Repo rate is the interest rate levied on money taken by financial institutions like banks and etc from RBI. Whenever Repo Rate reduced banks will benifit, pay less money to RBI as interest. Most banks will pass this benefit onto customer loans eventually. It is a good news for home buyers using a home loan. EMIs will reduce substantially.

In last February and April meetings also repo rate slashed by 25 basis points respectively. We can notice that in last six months a massive 100 points rate cut is performed by RBI. It will have lot of impact on new loans availed by bank customers. Loan customers will pay less interest on loan amount compared to previous year. The existing Repo Linked Loans will have immediate effect and emi payable get reduced by banks.