Several banks including ICICI Bank and Bank of Baroda have raised their interest rates on loans as a result of the RBI rate hike of 50 bps in the recent policy review. Other banks will likely follow the RBI’s goal of cooling inflation by making credit more expensive for consumers.
ICICI Bank has announced an increase in its external benchmark-based lending rate. According to the bank’s website, the “RBI Policy Repo rate effective August 5, 2022″ is 5.40%. ICICI Bank External Benchmark Loan Rate” (I–EBLR) refers to RBI Policy Repo rate with a markup over Repo Rat. I-EBLR is 9.10% p.a.p.m. Effective August 5, 2022
Here’s an example to show how much your EMI will increase after the latest I-EBLR hike. Let’s say you took a home loan for Rs 30 lakh. The I-EBLR was 8.60% in the past. Now, with the increase of 50 basis points in I-EBLR, the new I-EBLR is 9.10%.
Bank of Baroda
The Baroda Repo Linked Lending Ratio (BRLLR), has been raised with effect from August 6, 2022. The retail loan rate is 7.95%. According to the bank’s website, the BRLLR is composed of the current RBI repo rates (i.e. 5.40%) and a mark up/base spread of 2.55%.
A risk premium is also added to the BRLLR in order to calculate the home interest rate. According to the bank’s website, a risk premium is added for salaried customers. The risk premium is dependent on many factors, such as CIBIL score and job profile, loan amount, etc. The effective interest rate is between 7.95% to 9.30%
Canara Bank has raised its repo rate-linked loan rate from 7.80% to 8.30%. The new rate will take effect on August 7, 2022.
According to the bank’s website, the interest rate charged by the PSU lender for women home loan borrowers will be 8.5% and 8.10% respectively.
Punjab National Bank
The repo, which is the external benchmark, was also increased by the state-owned PNB to 7.90 percent. In a regulatory filing, PNB stated that the Repo Linked Lending Rat (RLLR), which was raised by RBI, has been revised to 7.40% from 7.90% with effect August 8, 2022.