New Delhi, Oct 1 (KNN) As the Reserve Bank of India (RBI) asked banks to link their lending rates on floating rate loans to retail, and micro, small and medium enterprises (MSME) borrowers to an external benchmark from October 1, 2019, Union Bank of India has announced the linking of their new floating-rate MSME and retail loans to the RBI Repo Rate.

The bank announced that all new floating rate loans to the two segments will be linked to the new external benchmark as directed by the RBI earlier this month to be effective from October 1, 2019.

Union Bank of India has fixed the External Benchmark Lending Rate (EBLR) at 8.25 per cent. “Effective rates for various schemes shall be at EBLR+ Premium for the product,” the bank said in a statement.

Earlier in the month of September, RBI had made it mandatory for banks to link all new floating-rate loans for housing, auto and MSEs to repo.

The banks have already started linking their lending rates to an external benchmark. Among these are public sector lender State Bank of India, Union Bank of India, Central Bank of India, Punjab National Bank and private sector lender Federal Bank.

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