Following Reserve Bank of India announcement about reduction of interest for short-term loans by 0.5%, Bharath State Bank has immediately followed suit by extending this by reducing its interest to the clients by 0.4%.
A review meeting of the finance policies for the current financial year was conducted in Mumbai today (Tuesday, 29th September) presided by RBI Governor, Mr. Raghuram Rajan.
It was decided to reduce REPO rate for loans given by Reserve Bank of India to other banks by 0.5 %. With this, REPO rate has come down from existing 7.25% to 6.75%. However, the working capital ratio will continue to be 4%.
The is reduction announced by RBI on short-term interest loans is expected to being down the interest rates of the banks for housing loans, vehicle loans, and business loans extended by the banks to their customers.
Reserve Bank has reduced the interest following the persistent demand of the government industrial sector to reduce the interest rates to facilitate the industrial growth.
Following this, Bharath State Bank has reduced its interest rate by 0.4% – the interest rate has come down from the existing 9.7% to 9.3%.
On this basis, the interest rates for all types of loans including housing loans, vehicle loans, etc has been reduced by 0.4%.
This reduction will be effective from 5th October morning.
As a sequence, other banks have also started announcing reduction in interest rates. Andhra Bank has reduced the basic interest rate by 0.25%. It has announced that the interest rates will be 9.75% from today (Tuesday, 29th September).
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