SBI and IOB cut interest rates by 120 basis points for common people
The benchmark repo rate of the Reserve Bank of India has come down from 5.15% to 4% last year, but private banks only gave relief to the people by 22 basis points i.e. 0.22%.
New Delhi. Reserve Bank of India is continuously cutting interest rates. Motive Corona To provide cheaper loans to people in crisis. But private sector banks have not lived up to this campaign. However, the government banks have definitely given some relief as per RBI’s intention. Private banks have not reduced the interest rates for the common people as much as the RBI did. In comparison, PSU banks of the country tried to bring the full benefit of the rate cut by the Reserve Bank to the common people. That is, government banks can prove to be a better option than private banks in the country for taking loans. ALSO READ: Naukri Ki Baat: New trends and future updates will provide new jobs and progress, know everything about this mantra Relief granted to only 22 basis points instead of 115 basis pointsIn the last one year, the Reserve Bank of India (RBI) reduced the policy rates by 115 basis points. In comparison, private sector Axis Bank, ICICI Bank, Federal Bank and DCB have given relief of only 22 basis points to customers on new loans. At the same time, the state banks of India (SBI), Indian Overseas Bank (IOB), cut the interest rates for the common people by 120 basis points. This information has been obtained from the data of Reserve Bank of India (RBI), the banking regulator of India. ALSO READ: Success Story: TPA left business to take care of parents, now has a portfolio of 3000 crores Basis point has such an effect on the interest rate
A basis point means 0.01 percentage point. This means that if the RBI has reduced by 115 basis points, then the interest rate should be cut by 1.15 percent. Also read: If you want to earn big money in the coronary period, then this fund will shine your luck, know everything Private banks increased profits due to expensive lending The profitability of private sector banks has increased due to the Reserve Bank of India (RBI) not extending the full benefit of the reduction in interest rates to the customers. In comparison, the profits of public sector banks (psu bank) have been weak. Also the truth is that the profit margins of private sector banks have been affected due to unsecured debt and high yield retail.