If the repo rate falls, should the home loan rate be the same or reduce?

[ImAnandPanchal]

If the repo rate falls, the loan rate will fall as well if the bank raises its commission, and the same rate applies. Is it possible?
For Example,
Loan Rate: 8.40%
Repo Rate: 6.50%
Bank Commission Rate: 1.90%

After 3 months, the repo rate falls to 5.50%
Bank Commission Rate Increase: 2.90%
My home loan rate is 8.40%

Is it possible?

 

[arjungoyal12]

The way you are saying it looks possible

 

[_rohitsoni]

IMO, banks can't increase the rate once you have availed a loan. So, if earlier they've approved you a loan for RepoRate+1.9% then once RBI decreases the repo rate you can ask bank to decrease it.
One trick banks employ is, when repo rate increases, they'll automatically increase interest on your loan, but when RBI decreases it, they won't do it automatically. You have to explicitly ask them to decrease it. So, if you are not very much aware of repo rate movement, banks enjoy higher income.