In a stock exchange filing this week, Allahabad Bank said that it will be launching retail loans and loans to MSMEs that will be linked to external benchmarks, starting 1 October. It also said that it will link large savings deposits to the Reserve Bank of India's (RBI) repo-rate on the same date.
"In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that in line with the RBI guidelines dated 04th September 2019, the Bank has decided to launch Retail loans and loans to Micro & Small Enterprise linked with External Benchmark Rates published by Financial Benchmarks India Pvt. Ltd. (FBIL). Presently, the Bank has identified RBI's Repo Rate and 03 (Three) month MIBOR as the Benchmark Rates," it said.
"Further, all the Saving Bank Deposits of Rs 40.00 Lakh and above, Long tenure Fixed Deposit, Bulk Deposits and Flexi Fix Deposits will be linked with External Benchmark Rate i.e. RBI's Repo Rate," the filing said.
"All the aforesaid products of the Bank will be available for general public with effect from 01st October 2019," it added.
In the upcoming RBI Monetary policy meeting, it is expected that the Central Bank will announce its fifth consecutive repo rate cut, which means that loans are likely to get 5 to 150 basis points cheaper in October than the current interest rates under MCLR. The Monetary Policy Committee is scheduled to meet on 4 October.