CURRENT AFFAIRS

Detailed explanation-1: -The six-member monetary policy committee (MPC) of the RBI, headed by governor Shaktikanta Das, unanimously decided to keep policy rates unchanged at 4% and the reverse repo rate at 3.35%, in view of inflation concerns.

Detailed explanation-2: -Your EMI will climb the fastest and be equal to the increase in the repo rate if your house loan is linked to the repo rate and was taken out under the External Benchmark Linked Rate (EBLR). The transmission is, however, somewhat slower for base rate-linked loans while it is the slowest for MCLR-linked loans.

Detailed explanation-3: -The MPC determines the policy repo rate required to achieve the inflation target. The MPC is required to meet at least four times in a year.

Detailed explanation-4: -In RLLR: It’s an external benchmark linked to RBI’s Repo Linked Lending Rate. If there’s a change in the repo rate by RBI, it would also affect your home loan interest rate. In MCLR: It’s an internal benchmarking where the bank sets interest rate considering its cost of funds.

Detailed explanation-5: -With the reduction, SBI’s home loan rate now stands at 7.75% as against 7.85% earlier. Do note here that all new home loans at the bank are now linked with the RBI repo rate.