IOB Loans: Indian Overseas Bank links retail loans with RLLR; Mudra loan, Housing loan, MSME loan becomes cheaper

IOB Loan: Chennai based Public Sector Bank Indian Overseas Bank (IOB), has linked Repo Linked Lending Rate (RLLR) to its loans to be sanctioned under Retail segment (Housing, Vehicle, Education and Clean loans) and Micro & Small Enterprises with effect from 1st October 2019. Henceforth, all the new loans under the said categories will be priced based on RLLR only. The new benchmark (RLLR) is fixed at Repo rate +2.85 % (8.25% at present). the IOB's decision to link its all retail and personal loans with the RLLP is in sync with the RBI's circular dated 4th September 2019 in which the central bank had advised all Indian banks to link its retail and personal loans with the RLLP.

Under this new benchmark, Housing Loans will be available at Cheaper Interest rates.  In addition to Housing Loans, other Retail Loans like Vehicle, Education and Clean Loans as well as Micro and Small Enterprise Loans will also be available at cheaper interest rates. Prior to IOB retail loan linking to the RLLP, IO home loan was available in the range of 8.65 per cent to 8.9 per cent. It would now go down by around 0.4 per cent for home loan seekers.

See Zee Business Live TV streaming below:

As a gesture to small borrowers, the Bank has decided to charge Mudra loans up to Rs 50,000 at an interest rate of 8.25% p.a. passing a benefit of 0.25% to these borrowers.

Further, Bank announced its decision to link interest rate on Savings Accounts (with the balance of Rs.25 Lac and above) However, the interest rate to be paid for such Savings Accounts is presently pegged at 4 per cent level offered by the Bank.