PNB, Allahabad Bank launch repo-linked loans

New Delhi: Leading state-owned lender Punjab National Bank and Allahabad Bank on Tuesday announced linking of their retail loans with the Reserve Bank's repo rate, which will make loans cheaper.

Punjab National Bank launched PNB Advantage, a retail lending scheme linked with the repo rate effective Tuesday. "In the new schemes rate of interest will be 0.25 per cent less than the existing applicable rates based on MCLR.

The new rates will vary from 8.25 per cent to 8.35 per cent for housing loan borrowers and 8.65 per cent for car loan borrowers," PNB said in a statement.

Existing customers of the bank will also have an option to switch over to new Repo Linked Lending Rates (RLLR) with minimal charges, it said. Allahabad Bank said it has benchmarked its loans up to Rs 75 lakh with the external benchmark linked rates (EBLR), comprising the repo rate as one of its constituents.

To ensure quicker transmission of policy rate adjustments, the bank has decided to price its housing loans up to Rs 75 lakh and Mudra loans sanctioned with effect from September 1, 2019, with reference to EBLR, Allahabad Bank said.