The Micro, Small and Medium Enterprises (MSME) sector was already being provided with easy access to credit through the 59-minute loan portal. Indian Overseas Bank (IOB) has issued a statement that in due course of time, the bank will also start offering retail products such as housing loan and personal loan on its online platform.
IOB has reduced its Marginal Cost of Funds based Lending Rate (MCLR) by 10 to 15 basis points for different tenors, effective from August 10th followed by RBI repo rate reduction. To further improve the rate of transmission, the bank is in the process of linking retail loan products with external benchmark repo rate. As of now, only SBI offers home loan linked to an external benchmark such as RBI's repo rate.
Reserve Bank of India (RBI) in its third bi-monthly Monetary Policy Statement for 2019-20 had cut the repo rate by 0.35 per cent. After the August policy rate cut, the repo rate is down by 1.10 per cent since January 2019.
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IOB has been actively participating on www.psbloansin59minutes.com , an online portal for sanction of MSME loans. Going forward, IOB will offer retail loans through the online portal as well. The bank is also in the process of extending in-principle sanction for loans up to Rs.5 crore under MSME segment.
The initiative to extend personal loans in quick time will help those looking to borrow money when hard-pressed for time. Hopefully, the portal will allow uploading of relevant documents in order to get the loan sanctioned and disbursement. With the complete process online, the transactions will become more transparent and also help the bank reduce costs. Even home loan borrowers will stand to gain with the application process going online.