Oriental Bank of Commerce Home Loan Interest Rates
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About Oriental Bank of Commerce

Oriental Bank of Commerce has the distinction of being the only nationalised bank in India to be established in Pakistan. Rai Bahadur Lala Sohan Lal established the bank in 1943 in Lahore. In 1947, the partition forced the bank to close its registered office in Lahore and shift to Amritsar. The bank proved its trustworthiness by repaying every rupee invested by the Pakistani citizens in the bank. The bank was nationalised on April 15, 1980, in the second lot. Today, the bank has more than 2700 branch offices and 2600 ATMs across India. Oriental Bank of Commerce along with United Bank of India, will now merge with Punjab National Bank as announced in the recent PSB merger. Thus, from April 01, 2020, the bank will function as a new entity and a new name.

Oriental Bank of Commerce Home Loan

Oriental Bank of Commerce has a range of deposit and loan products to offer. Apart from the regular business and corporate loans, Oriental Bank of Commerce caters to the retail segment, industries, and agriculturists, as well. Home Loans form a significant component of the retail loan segment. Oriental Bank of Commerce has a well-defined Home Loan product that ensures to meet all housing requirements across every section of society.

Some of the salient features of the Oriental Bank of Commerce Home Loan are its simple eligibility norms and transparent processing. Oriental Bank Commerce has one of the most attractive Home Loan interest structures, as well. The bank has a commanding presence in the northern states in India. It is a forerunner in providing PMAY loan to eligible beneficiaries all over India.

Oriental Bank of Commerce - Home Loan Offers

Oriental Bank of Commerce Home Loan

Purpose

  • Purchase of residential plot and construction thereon
  • Construction of a house on land already owned by the applicant
  • Purchase of new/second-hand flat or apartment
  • Purchase of a unit under construction from a builder
  • Repairs and renovation to the existing house
  • Purchasing home furnishings and furniture
  • Home Loan balance takeover from other financial institutions

Target

  • Individuals having a regular source of income

Age requirements

  • The minimum age of the housing loan applicant should be 18 years
  • The maximum age of a salaried individual should be 60 at the maturity of the loan.
  • Self-employed individuals can repay the Home Loan until they turn 75 years of age.

Quantum of loan

  • Housing loan - No upper limit
  • Home repairs - Maximum 25 Lakhs

Margin

  • 10% on loans up to 30 Lakhs
  • 20% on loans more than 30 Lakhs and up to 75 Lakhs
  • 25% of Home Loans above 75 Lakhs
  • 25% on home furnishing loans

Oriental Bank of Commerce Home Loan Interest Rate

Repo Linked Lending Rate Concept - RLLR

Reserve Bank of India observed that banks were slow in passing off the benefits to the customers. To set things right, the RBI instructed all commercial banks in India to introduce an external benchmark rate-linked loan product for the retail and MSME segment. Oriental Bank of Commerce has thus launched new retail and MSE loan products with interest rates linked to the repo rate. Reserve Bank of India had recommended banks to use any of the following external benchmark rates for determining their new interest structure.

  • Repo rate
  • Three or six-month Treasury Bills rate
  • Any other benchmark rate published by Financial Benchmarks Pvt Ltd

Oriental Bank of Commerce will introduce these new products with effect from October 01, 2019.

Calculation of the RLLR

  • The base rate for the calculation of the RLLR is the repo rate
  • The bank adds the average net interest margin for the last ten years rounded off to the nearest five basis points.

The banks can now load a margin over the RLLR by giving weightage to factors like value of security and credit history of the borrower.

With the introduction of the RLLR, the Home Loan interest rates in Oriental Bank of Commerce will begin at 8.35%.

Marginal Cost of Funds Based Lending Rates - MCLR

The RLLR concept will start functioning from October 01, 2019. It will initially be available to new loans sanctioned after October 01, 2019. The existing MCLR concept will run concurrently with the RLLR. The MCLR is also a market-related rate but with many limitations.

 MCLR comprises of the following four factors:

  • The marginal cost of funds
  • Tenor premium
  • Operating cost
  • CRR negative carry

Oriental Bank announces its MCLR every month. The latest such revision was on September 10, 2019. The bank reduced its MCLR by 0.15% to 0.25% over the entire tenor range.

Tenor Overnight 1-month MCLR 3-month MCLR 6-month MCLR 1-year MCLR

MCLR

7.90%

8.00%

8.15%

8.30%

8.40%

The Home Loan interest rates linked to MCLR are as follows:

Amount Slab The Margin on Home Loan Rate of Interest The Effective Rate of Interest

Up to 30 Lakhs

Higher than or equal to 20%

One-year MCLR

8.40%

Less than 20% and greater than or equal to 10%

One-year MCLR + 0.10

8.50%

Above 30 Lakhs <= 75 Lakhs

Greater than or equal to 25%

One-Year MCLR

8.40%

Less than 25% and higher than or equal to 20%

One-year MCLR + 0.10

8.50%

Above 75 Lakhs <= 2 Crores

Greater than or equal to 25%

One-year MCLR + 0.25

8.65%

Above 2 Crores

Greater than or equal to 25%

One-year MCLR + 0.50

8.90%

Home Loans qualifying under Commercial Real Estate (CRE) - Rate of interest is 1% over the regular housing loan rate of interest.

Base Rate Mechanism

MCLR came into effect from April 01, 2016. Before April 2016, Oriental Bank of Commerce was following the Base Rate mechanism. There could be some borrowers still in the Base Rate regime. Hence, Oriental Bank of Commerce announces its Base Rate from time to time. The Base Rate of Oriental Bank of Commerce is 9.50% with effect from June 30, 2018.

Benchmark Prime Lending Rate Mechanism - BPLR

The Base Rate mechanism was in force since July 01, 2010. The interest rate mechanism in force before July 2010 was the BPLR regime. The BPLR of Oriental Bank of Commerce with effect from May 14, 2012, is 14.75%.

Oriental Bank of Commerce - Home Loan Processing Charges

The revised processing charges on Home Loans with effect from August 01, 2019, are as follows:

Oriental Home Loan

Loan Amount Slab

Metro/Urban areas

Rural/Semi-urban areas

Up to 25 Lakhs

0.60%

Minimum - 12,000

Maximum - 15,000

0.50%

Minimum - 10,000

Maximum - 12,500

Above 25 Lakhs <= 50 Lakhs

0.60%

Minimum - 20,000

Maximum - 30,000

0.50%

Minimum - 15,000

Maximum - 25,000

Above 50 Lakhs

0.40%

Minimum - 20,000

Maximum - 45,000

0.40%

Minimum - 20,000

Maximum - 35,000

The processing fees in case of Balance Takeover Loans:

  • If taken over from public and private sector banks
    • Up to 50 Lakhs - 10,000
    • Above 50 Lakhs - 15,000
  • If taken over from housing finance companies or NBFC: The charges on regular Home Loans shall apply.

How to Apply for Oriental Bank of Commerce Home Loan?

  • Apply online through the Oriental Bank of Commerce official website
  • Approach any branch of the bank and apply in person
  • Apply through MyMoneyMantra

Oriental Bank of Commerce - Home Loan EMI Calculation

Borrowers can use the online EMI Calculator provided on the Oriental Bank of Commerce webpage.

Provide the following information to get your Home Loan EMI:

  • Loan amount
  • Rate of interest
  • Repayment tenure in months

Alternatively, borrowers can confirm the EMI using the online EMI Calculator provided at the MyMoneyMantra website.

  • Access the MyMoneyMantra.com website
  • Proceed to click 'Financial Tools'
  • Select 'EMI Calculator'
  • Enter the data as requested
  • Click on 'Calculate' option
  • You get the EMI and the break-up of interest and principal repayment over the entire repayment tenure.

Oriental Bank of Commerce - Home Loan Repayment

Customers having savings or current account in Oriental Bank of Commerce can use the following modes of Home Loan repayment:

  • Submit post-dated cheques
  • Set up a Standing Instruction to debit the savings or current account for the EMI
  • Use the internet or mobile banking facilities to repay the loan instalment
  • Pay cash into the account by visiting any of the bank branch offices

Borrowers who do not have a savings or current account can follow the laid down procedure:

  • Submit post-dated cheques from their account
  • Register for an ECS mandate to ensure automatic repayment of the Home Loan
  • Use internet banking or mobile banking facilities to remit money to Oriental Bank of Commerce through NEFT/RTGS/IMPS. It is also possible to use this mode of repayment by visiting your bank branch.
  • Pay cash at any Oriental Bank of Commerce branch office

Oriental Bank of Commerce Home Loan Interest Rates - Frequently Asked Questions

When will the new retail products linked to RLLR be launched in Oriental Bank of Commerce?

Oriental Bank of Commerce will be launching the new Home Loan and vehicle loan products from October 01, 2019. The interest rate on these retail loans will link with the repo rate. Therefore, the benefits of market-rate reduction will directly pass over to the customers.

Will the benefit be available the moment RBI announces the changes in the repo rate?

No, the RLLR will change from the first day of the month following the RBI announcement. Thus, if RBI changes the repo rate in November, the corresponding change in the RLLR will take effect from December 01.

Will all the customers of Oriental Bank of Commerce benefit from the RLLR structure?

Oriental Bank of Commerce has announced that new loans sanctioned after October 01, 2019 will link with the RLLR. Therefore, the benefit of RLLR is for new customers, at present. However, the bank will come up with a conversion option for existing customers to permit them to switch over to the RLLR from the current MCLR structure.

Is RLLR compulsory for all customers?

No, RLLR and MCLR will run concurrently at the moment. Borrowers can choose the MCLR concept over the RLLR by declaring their preference at the time of applying for the loan.

Are there any drawbacks of RLLR?

The RLLR concept is a well-thought-out one. However, there can be volatility because of frequent changes announced by the Reserve Bank of India. As on date, it appears better than the MCLR structure. However, time will tell whether it will benefit the customers or not.

Is there an alternative to the repo rate for deciding the external benchmark linked interest rate?

RBI proposed three alternatives to the banks for switching over to an external benchmark rate.

  • Repo rate controlled directly by RBI
  • Three or six-month T-bill rates announced by FBIL
  • Any other benchmark rate published by FBIL

Which is the best option among the rates listed above?

Banks like Citibank have adapted to the 3-month T-bill rate from January 2018. It is working perfectly for the bank. However, there can be extreme volatility in the T-bill rates. Therefore, the repo rate seems to be the best bet among the three rates mentioned above.

What will happen if the RLLR goes above the MCLR at any point in time?

Such a scenario can happen anytime. Under such circumstances, the Home Loan rates linked to RLLR will be expensive as compared to those related to the MCLR. However, borrowers should note one point. The repo rate drives other market rates. Therefore, the marginal cost of funds can also increase with the increase in the repo rates. The MCLR is dependent on the marginal cost of funds and other factors. It can also increase, thereby pushing the Home Loan rates up, as well. The MCLR-linked home rates will also increase when the bank resets them. The only difference between RLLR and MCLR is that the RLLR effect is immediate, whereas it can take time for the MCLR to become active.

Will the deposit rates be linked to the RLLR?

Ideally, there should be floating rate deposits in the Indian banking sector. It will help the banks to take care of the Asset-Liability mismatch. However, many banks have announced the linking of savings deposits having a high average balance with the RLLR. It is an experiment today that could become effective for all deposits in the future.

What will happen to Oriental Bank Home Loan interest rate after its merger with Punjab National Bank in April 2020?

The interest rates of Punjab National Bank will come into force after the merger. As on date, there is not much difference in the interest rates among all nationalised banks. Therefore, it should not affect the existing customers of Oriental Bank of Commerce.

Oriental Bank of Commerce Home Loan Interest Rates - Latest News

Oriental Bank of Commerce announces linking of retail loan products with RBI's repo rate

Gurgaon-based Oriental Bank of Commerce plans to introduce new retail loan products by linking the interest rates to RBI's repo rates. These new products will take effect from October 01, 2019. Home Loans and vehicle loans sanctioned after October 01, 2019 will start with an interest rate of 8.35% and 8.70% respectively.

Oriental Bank of Commerce reduces its MCLR by up to 0.15 basis points

With Reserve Bank of India announcing its latest repo rate reductions, Oriental Bank of Commerce has cut its MCLR in the range of 0.05 to 0.15 basis points across all tenors. The one-year MCLR of the bank thus stands reduced to 8.40% from 8.55% earlier.

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