The interest rate, with the new directive of the Reserve Bank of India, is likely to decrease to home loan buyers before April 2016.
Banks used base rate system called base rate to determine credit flow rate. Accordingly, each bank used separate methods to determine the minimum interest rate. Complaints have been raised by the banks that the Reserve Bank lowered the repo rate because banks decided to unilaterally rate the interest rate, and the banks did not cut interest rates.
Following this, the Reserve Bank introduced MCLR (new MCLR) from April 2016. Accordingly, the interest rate is calculated on the basis of MCLR system for household borrowers after April 2016. But before that, the old base rate was followed by the debtor. In this case, the Reserve Bank of India has directed banks to follow the entire MCLR system from April to April.