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Lending rate and Repo rate to be linked
Why is it in the news?
- Several public-sector banks volunteered to link their lending rates to the repo rate to facilitate quicker transmission.
More in the news
- The move to link lending rate to repo rate could lead to faster transmission of monetary policy rates.
- This means if the Reserve Bank of India changes the repo rate, the retail loan rates will change automatically.
- Four lenders — Bank of India, Syndicate Bank, Allahabad Bank and Union Bank — have said they have either linked the lending rate to repo rate or are in the process of doing so.
Source
The Hindu.