Help Needed: Home Loan Interest Rate Increased Despite RBI Repo Rate Cut

[mauleek]

Hello Everyone,

I need some guidance on how to handle an issue with Bank of India regarding my home loan interest rate. My loan is on a floating interest rate basis, which means it should be linked to the Repo Based Lending Rate (RBLR).

Here’s what happened:

1. My original home loan interest rate was 8.70%.
2. After the RBI reduced the Repo Rate from 6.5% to 6.25% on February 7, 2025, the Bank of India app showed my interest rate had reduced to 8.45%.
3. However, when I checked again recently, my interest rate had suddenly increased to 9.10% instead of decreasing.
4. When I raised a query with the bank, they replied stating that my loan undergoes an "annual review" and that the rate was revised as part of this process. They also mentioned that my request for rate reduction has been forwarded to the higher authorities.

My concerns:

• Since my loan is based on RBLR (Repo Based Lending Rate), it should move in line with the RBI Repo Rate changes. How can the bank justify an increase when the RBI has actually reduced the Repo Rate?
• Why did the rate first decrease to 8.45% and then suddenly increase to 9.10%? This is contradictory and lacks transparency.
• The bank’s response doesn’t provide a valid reason for the hike; they just mentioned an "annual review" on March 19, 2025 but didn’t explain the actual basis for increasing the rate.

Has anyone else faced a similar issue with their home loan? What steps can I take to escalate this matter effectively and get the bank to correct the interest rate?

Looking forward to your advice and suggestions.

Thanks in advance!

Maulik

 

[marshal]

File an complaint with RBI Ombudsman and also threaten your bank about transfar your loan in other banks.