SBI's new home loan product is transparent, but volatile in nature

The repo rate is usually revised during RBI's credit policy announcements, which takes place every two months

State Bank of India, India’s largest bank, announced last week it would offer a product linked to the repo rate from July 1. This is the first big step taken by a large bank tow­ards linking home loan rates to an external benchmark — something that was supposed to begin on April 1 for all banks, but has been delayed. The repo rate is the interest the RBI charges for lending money overnight to banks to help them meet their shortfalls. 

Customers who feel home loan rates should be made more transparent will be happy at this move. Even the