Home loans: You can get the best deals even in the MCLR-based regime

Instead of getting disheartened by the central bank's decision to defer the implementation of the external benchmark regime, borrowers should try to make the most of the existing regime

The Reserve Bank of India (RBI) had announced in December 2018 that home and several other retail loan rates would be linked to external benchmarks from April 1, 2019. However, the central bank has now decided to shelve this proposal indefinitely. While this is indeed a setback, customers can, by staying vigilant, ensure they get the best loan deals within the existing marginal cost of funds-based lending rate (MCLR) regime.

Shift to transparent benchmarks held up: The central bank was earlier keen to usher in external benchmarks to make the rate setting process more transparent. “Banks have always used internal benchmarks