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Will the existing customers linked to FRR//PLR/I-Base based benchmark rate be allowed to migrate to I-MCLR-1Y based pricing without change in effective rate of interest?

All existing customers has an option to switch from the existing system of FRR/PLR/I-Base (FRR/PLR/I-Base +/- spread) to the new system of I-MCLR-1Y (I-MCLR-1Y + spread) without changing the effective rate of interest. No switch fee would be charged for this option. The effect of conversion in the system, from existing system of FRR/PLR/I-Base to new system of I-MCLR-1Y, will be provided on an immediate basis.

 

Illustration: If an existing customer with loan amount of ₹ 2.5 million is at 9.55% p.a. effective ROI (I-Base + 0.20%) and if the customer opts to switch-over to I-MCLR-1Y then the Adjustable Rate Home Loan (ARHL) interest rate will become (I-MCLR-1Y (9.15%) + spread (0.40%)) equivalent to 9.55% p.a..

 

Thus, the effective rate will continue to remain same at 9.55% p.a. with spread applicable on the loan being adjusted.