ICICI Bank, the second-largest private sector lender and India’s state-owned bank, raised their interest rates across all maturities on Monday in anticipation of a rate hike by the RBI later this week.
Rates have been increased for all maturities under the marginal cost of fund-based lending rates (MCLR) system, a move that will make EMIs expensive for those who have used loans benchmarked against the MCLR.
Under the revised rates, effective Aug. 1, ICICI Bank’s one-year MCLR is up 15 basis points, or 0.15 percent, to 7.90 percent, while the overnight MCLR is up to 7.65 percent, according to information on its website. from the bank.
The one-year MCLR is considered important from a retail lending perspective, as a bank’s long-term loans, such as home loans, are tied to this rate.
The rate hike comes ahead of the RBI’s Monetary Policy Committee (MPC) meeting later this week. The MPC is widely expected to raise interest rates to curb high inflation.
Later in the day, state-owned Indian Bank announced a revision of its one-year MCLR to 7.65 percent, up 0.10 percent from existing interest rates.
The other tenor MCLRs, from overnight to 6 months, have been revised upwards to 6.85-7.50 percent, Indian Bank said.
It has also revised the TBLR (Treasury Bill Benchmark Linked Lending Rate) of more than 1 year to maturities less than or equal to 3 years from 6.15 percent from 6.10 percent, among others.
It said the revised MCLR and TBLR will be in effect from August 3.
“Other existing benchmark rates, namely the policy repo rate, RBLR, base rate and BPLR, remain unchanged,” it added.
Last week, mortgage lender HDFC raised its borrowing rate by 0.25 percent.
Indiabulls Housing Finance Ltd (IBHFL) also raised its benchmark housing and MSME loan interest rates by 25 basis points in line with other players.
The new rates apply to new customers from August 1 and to existing borrowers from August 5.
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