Home / Finance / News / Retail, MSME loans to get cheaper as RBI cuts repo rate in surprise action

Retail, MSME loans to get cheaper as RBI cuts repo rate in surprise action

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2 min read Last Updated : May 23 2020 | 1:06 AM IST

With the 40-basis point cut in the repo rate, retail and MSME (micro, small and medium enterprise) loans linked to the external benchmarks are set to become cheaper. The deposits rates are also likely to be slashed, as lenders are focussing on protecting margins, according to bankers.

The rate transmission in the case of loans linked to an external benchmark such as the policy repo rate will be automatic, they said.

Banks will soon hold a meeting of their Asset-Liability Committee (ALCO) to decide on loans linked to the marginal cost of funds-based lending rate (MCLR). ALCOs will also review the deposit

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