The banks will soon make home and car EMIs cheaper, Finance Minister Nirmala Sitharaman announced on Friday. Nirmala Sitharama's statement came at a surprise press conference during which she spoke about the Indian economy at large.
Nirmala Sitharaman said that the Reserve Bank of India (EBI) had been cutting down the repo rate (the rate at which the central bank lends money to consumer banks) every quarter but the banks were not passing on the rate cut to the borrowers.
The banks have now agreed to grant this benefit, Sitharaman said.
"The banks have now decided to pass on any rate cut through MCLR reduction to benefit all borrowers. This will result in reduced EMIs for housing loans, vehicles and other retail loans, by directly linking repo rates to the interest rates," Nirmala Sitharaman said.
Banks have agreed to LINK REPO RATE TO INTEREST RATE; this will cause reduced EMIs for housing and vehicle loans and other retail loans: Union Minister @nsitharaman #GovtBoostsEconomy pic.twitter.com/9h6pKgmWkePIB India (@PIB_India) August 23, 2019
"Within 15 days of closure of the loan amount, all papers to be given back to the customers," she said.
Nirmala Sitharaman also said that the RBI discussed that the aim is to reduce the interest rate on housing and the auto rate.