Public sector Allahabad Bank has announced a steep reduction of 0.40 per cent in the interest rate for loans based on external benchmark-linked. With this, the new rates announced by the bank will be effective from March 1, 2020. The bank has informed the stock exchanges, "... the asset liability management committee of the bank has decided to revise the interest rates for products linked to the external benchmark." With this, these rates may come into effect from March 1, 2020. "Currently, the RBI has not reduced the interest rate in the repo rate in the bi-monthly monetary review on the last two occasions. The repo rate of RBI is currently 5.15 percent.
RBI cut repo rate by 1.35% last year
The central bank had cut the repo rate on five consecutive occasions last year. The RBI reduced the key policy rate repo rate by 1.35% last year. At the moment, the central bank, concerned about banks not being able to pass on the benefit of the repo rate reduction to the general customers, made it mandatory to introduce external benchmark based products, taking a tough stance. The central bank had cut the repo rate to reduce the burden of EMI on the people, which left more cash in their hands and increased domestic congestion.
Allahabad Bank came into existence in 1865
Earlier on February 14, the bank had reduced the interest rate based on Marginal Cost of Funds by 0.05%. The bank had announced a reduction in the interest rate on all term MCLR based loans. Allahabad Bank is headquartered in Kolkata. At the same time, Allahabad Bank was established in 1865 in Allahabad. Along with this, Allahabad Bank will merge with Indian Bank on April 1, 2020, in the proposed banks' Mahavidyalaya, which was announced by the Central Government in August last year.
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