It has been reported that the apex bank- reserve bank of India is seeking a new way that will provide easy credit options for the home loans. The panel is proposing a benchmark for floating rate loans for banks that will help to give borrowers a better estimate of their credit cost.
Panel has proposed various measures to make the home loans transfer faster. Panel also recommended that rates should be fixed without getting caught up with when banks change their Base Rates. Further they stated that no extra charges should be taken from the customers in case they transfer from BPLR linked rates to base rates.
If the proposal of the panel is implemented it will make loan cheaper and easier for the customers. Many times banks change the rates without informing the customers. This proposal will bring more transparency. Panel also reported that floating rate loan covenant may have interest rate reset periodicity and the resets may be done on those dates only, irrespective of changes made to the Base Rate within the reset period.