Loan Against Securities FAQs

The Reserve Bank of India (RBI) vide its circular no DBR.DIR.BC.No.14/13.03.00/2019-20 on “External Benchmark Based Lending” dated September 04, 2019 and RBI vide circular no. DBR. Dir. No.85/13.03.00/2015-16 on “Interest Rate on Advances” dated March 03,2016 , updated as on September 04,2019 has advised to link all new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro and Small Enterprises extended by banks with effect from October 01, 2019 to external benchmark which can be one of the following:

- Reserve Bank of India policy Repo rate
- Government of India 3-Months Treasury Bill yield published by the Financial Benchmarks India Private Ltd (FBIL)
- Government of India 6-Months Treasury Bill yield published by the FBIL
- Any other benchmark market interest rate published by the FBIL.

In line with the above circular, Axis Bank has adopted Repo rate as the external Benchmark lending rate with effect from October 01, 2019.

New customer at Repo rate : - All new floating rate loans and credit limits renewed with effect from October 01, 2019 will be linked to Repo rate.

Existing customer at MRR/BPLR/Base rate/MCLR: - Existing loans and credit limits linked to MRR/BPLR/Base rate/MCLR shall continue till repayment or renewal, as the case may be. Only if existing customers approach us and give request for switching from MRR/BPLR/Base rate/MCLR to Repo rate then only it will be changed. Once transitioned to Repo rate, the customer can’t switch back to the old benchmark rates.

All floating rate loans will be linked to Repo rate. The rate offered to you shall be the Repo rate plus spread. It may be noted that the Repo rate would be reset every three months.

Further, the Bank is free to decide the spread over the Repo rate. The spread may undergo a change during the tenure of the loan.

Bank will publish the Repo rate every month on a pre-announced date. The rate applicable to you would be the prevailing Repo rate for that month.

For all loans linked to Repo rate, the reset frequency would be three months.

YES, for all floating rate loans/credit facilities, if customer is on MRR/BPLR/Base rate/MCLR, customer can give request to move to Repo rate. Hence, the benchmark rate and spread shall undergo a change. Since the effective rate is being kept the same, only an administrative fee shall be charged from you.

You are requested to visit the nearest loan center along with the co-applicant(s) and/or guarantor(s), since there would be additional documentation involved.

No, there is no option to move back from Repo rate to Base rate/BPLR/MRR/MCLR.

Applicable Repo rate for each month will be updated on Axis Bank Website.

You will come to know through our Website / SMS / Email/ letter as deemed fit.