Loans To Become Dearer As Several Banks Hike Lending Rates After RBI’s Repo Rate Increase. Details HERE

RBI hiked the main policy rate by 40 basis points to 4.40 per cent and the cash reserve ratio (CRR) by 50 basis points to 4.50 per cent to suck out liquidity and bring down the elevated inflation.

New Delhi: Several state-owned and private banks are raising the interest rates after the Reserve Bank of India (RBI) jacked up the Repo rate in a surprising move on Wednesday. RBI hiked the main policy rate by 40 basis points to 4.40 per cent and the cash reserve ratio (CRR) by 50 basis points to 4.50 per cent to suck out liquidity and bring down the elevated inflation. Since then, from the public sector Bank of India (BOI) to private HDFC Ltd, several banks have hiked lending rates in the past four days.

With this move, the central bank aims to keep inflation – which is already close to 7 per cent — at its desired level. RBI is also aiming to control and monitor money flow into the banking system at a time when the global economy is facing turbulent times.

List of banks that have hiked lending rates post-RBI’s announcement:

HDFC Ltd

HDFC on Saturday announced that it would raise its Retail Prime Lending Rate (RPLR) by 30 basis points. It would lead to an identical hike in home loan rates for existing customers. The hike will come into effect from May 9.

The mortgage lender had recently increased its benchmark lending rate by 5 basis points. The revised rates for new borrowers will now range between 7% and 7.45%, depending on credit and loan amount. The existing range is 6.70% to 7.15%.

Punjab National Bank (PNB)

Punjab National Bank has increased interest rates on term deposits in selected buckets up to 60 basis points with effect from Saturday. “The revised interest rates will be applicable to fresh deposits and renewal of existing deposits with effect from May 7 this year,” said an official statement issued by PNB.

For term deposits of less than Rs 2 crore, it has raised the interest rates to up to 5.10-5.15 per cent, and for single term deposits of Rs 2 crore and up to Rs 10 crore, customers will get interest rates in the range of 3.50 – 4.05 per cent per annum, it said. PNB said all other interest rates shall remain unchanged and the change in rates will also be applicable to NRE/NRO term deposits (Callable only) scheme.

The State-owned bank has also increased the repo-linked lending rate (RLLR) from 6.5 per cent to 6.9 per cent with effect from June 1 for existing customers, according to an official statement issued by PNB.

ICICI Bank

ICICI Bank raises the external benchmark lending rate by 40 bps to 8.10 per cent. “ICICI Bank External Benchmark Lending Rate” (I-EBLR) is referenced to RBI Policy Repo Rate with a mark-up over Repo Rate. I-EBLR is 8.10 per cent p.a.p.m. effective May 4, 2022,” the bank mentioned on its site.

Bank of Baroda (BOB)

State-owned Bank of Baroda also revised the external benchmark linked lending rate, with effect from May 5, 2022. “For retail loans applicable BRLLR is 6.9% with effect from May 5, 2022 (current RBI repo rate: 4.4% plus mark-up of 2.5%),” Bank of Baroda said.

BoB had introduced Baroda Repo Linked Lending Rate (BRLLR) in respect of all retail lending products from October 2019.

Central Bank

The state-owned Central Bank of India has also revised the RBLR by 0.4 percentage points, with effect from May 6. The revised RBLR of the Central Bank of India will be 7.25% plus the credit risk premium (CRP), from the existing rate of 6.85% plus CRP, the lender said.

Bank of India (BOI)

Bank of India said the RBLR (Repo Based Lending Rate), with effect from May 5, 2022, is 7.25% as per the revised repo rate (4.4%).

State Bank Of India (SBI)

The country’s largest lender State Bank of India (SBI) has been charging the EBLR at 6.65% plus the credit risk premium, with effect from April 1, 2022.

EBLR is a sum of external benchmark rate (EBR) and credit risk premium (CRP). Last month, SBI raised the marginal cost-based lending rate (MCLR) by 10 basis points across all tenures.

With the revision, SBI’s benchmark one-year MCLR — against which most of the consumer loans are priced — increased to 7.1% per annum.