New borrowers set to get maximum benefit as RBI delivers another rate cut

Since the repo rate has been revised by 115 bps in the last two months, EMIs would fall when banks reset loan rates

With the RBI announcing yet another rate cut to support the economy, both deposit and lending rates are set to reduce. And the benefit will be felt first by new borrowers whose loans are linked to the external benchmark, that is, the repo rate. In times like these, when everyone is looking to reduce costs, a 115- basis point (bp) cut (since March 27) in repo will lead to a sizable reduction in their equated monthly instalments (EMIs).

But fixed-deposit investors will feel the pinch, as the RBI’s rate cut is likely to be passed on to depositors promptly. “Not