Bank account holder? Interest rates of these lenders to change; Know impact on your pocket

Many banks have made changes in their interest rates over the last few days. If you are a Union Bank of India or Bank of India customer, then you should know the new interest rates that have come into effect from 1 June.

Union Bank of India cuts rates
The Union Bank of India on Saturday announced a cut in the External Benchmark Lending Rates (EBLR) by 40 bps. The EBLR now is at 6.80 per cent. The bank has made this change in the wake of a recent cut in the Repo Rate by the banking regulator Reserve Bank of India (RBI).

“The revised rates will be applicable from 01st June 2020. Effective rates for various schemes shall be at EBLR+ Premium/Discount for the product," the bank has said in a media release. Union Bank of India had introduced EBLR based lending rates for all new floating rate loans to Retail and Micro & Small Enterprises segment, in line with RBI guidelines.

 Interest rates of Bank of India (BOI) to change
This public sector bank has reduced its Marginal Cost of Lending Rate (MCLR) by 0.25 per cent. This is likely to reduce the interest rates for home loans and car loans. This will also reduce the EMI on the existing loans of the customers. As per the bank, this cut will reduce the interest rate on loan payment to 7.70 per cent annually. The current rate is 7.95 per cent.        
Interest rates of loans linked to repo rate also reduced

Similarly, the BOI, announced a 40 basis points cut in its external benchmark lending rate (EBLR) which is linked to RBI”s repo rate from June 1. The bank’s new EBLR has been revised to 6.85 per cent per annum.

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The RBI had on 22 May 2020, reduced the key interest rate or the repo rate by 40 bps, after a yet another out-of-turn Monetary Policy Committee (MPC) meeting in the wake of the COVID-19 pandemic induced lockdown.