On their loan reset dates, borrowers of home loans and other loans should expect to see an additional increase in their EMIs.
According to the Axis Bank website, overnight and one-month MCLR stand at 8.55 percent; three-month MCLR is at 8.65 percent; six-month at 8.70 percent; one-year at 8.75 percent; two-year at 8.85 percent; and three-year at 8.90 percent.
The base rate is at 9.15% which has been since September 17, 2022.
What will be the implications of Repo rate for Customers?
According to the Axis bank FAQ page, “New customer at REPO RATE:- All new floating rate loans and credit limits renewed with effect from October 01, 2019 will be linked to Repo rate.
Existing customer at MRR/BPLR/Base rate/MCLR:- Existing loans and credit limits linked to MRR/BPLR/Base rate/MCLR shall continue till repayment or renewal, as the case may be. Only if existing customers approach us and give request for switching from MRR/BPLR/Base rate/MCLR to REPO RATE then only it will be changed. Once transitioned to REPO RATE, the customer can’t switch back to the old benchmark rates.”
What is External Benchmark based lending?
According to the Axis Bank FAQ page, “The Reserve Bank of India (RBI) vide its circular no DBR.DIR.BC.No.14/13.03.00/2019-20 on “External Benchmark Based Lending” dated September 04, 2019 and vide circular no. DBR. Dir. No.85/13.03.00/2015-16 on “Interest Rate on Advances” dated March 03, 2016, updated as on September 04,2019 has advised to link all new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro, Small and Medium Enterprises extended by banks with effect from October 01, 2019 to external benchmark which can be one of the following: uioplkjOLK – Reserve Bank of India policy repo rate
• Government of India 3-Months Treasury Bill yield published by the Financial
• Benchmarks India Private Ltd (FBIL)
• Government of India 6-Months Treasury Bill yield published by the FBIL
• Any other benchmark market interest rate published by the FBIL.
In line with the above circular, Axis Bank has adopted Repo rate as the external Benchmark lending rate with effect from October 01, 2019.”