Repo Cut Passed? Your EMI May Still Be Stuck

RBI cut the repo rate but many bank lending rates are mixed — some falling, some not. If your loan is MCLR-based, you may be waiting months for relief. EBLR-linked borrowers get it faster. Here's what to check.

Here's what happened: RBI data shows bank lending rates are mixed in August — some fell slightly, some held steady, with the one-year MCLR declining marginally in recent months.. Fresh deposit rates have fallen, meaning banks are already paying new FD investors less — but loan rate transmission to borrowers remains uneven and slow.. External benchmark-linked loans (EBLR) are gaining share among floating-rate rupee loans, giving more borrowers faster transmission of RBI rate cuts..

What you should do: Check your loan sanction letter or call your bank to confirm whether your home or personal loan is MCLR-based or EBLR-based — this one fact determines when your EMI drops.. If you are on MCLR, ask your bank about switching to an EBLR-linked loan — a one-time conversion fee is usually worth it if you have more than 5 years of tenure remaining.. Avoid locking fresh savings into long-term FDs at today's lower deposit rates — wait 60 days to see if rates stabilise before committing to a 3-year or 5-year FD..

RBI rules require EBLR-linked loan rates to reset within 3 months of a repo rate change — if your bank has missed this window, you can formally write to its grievance cell to demand a backdated correction.