State-run IDBI Bank on Monday said the introduction of repo-linked retail loans would be effective from October 1 in place of September 10.

However, in view of the RBI directive last week, to link all new floating rate retail loans (personal segments) to external benchmark with effect from October 1, the introduction had been deferred, it said.

“IDBI Bank on August 30, 2019, had announced that it would introduce repo rate-linked home and auto loan with effect from September 10, 2019. However, in view of RBI’s directive issued on September 4, 2019, to link all new floating rate retail loans (personal segments) to external benchmark with effect from October 1, 2019, the introduction of repo-linked home loan and auto loan has been deferred,” it said in a statement.

On September 4, RBI mandated banks to link fresh retail loans to an external benchmark, for example, repo-rate. The move is aimed at including fresh retail and MSME loans from October 1 where home and auto loans will get cheaper.

 

(With inputs from agencies)