ICICI Bank and Indian Bank made loans expensive, rates increased even before repo rate hike

The Reserve Bank is going to increase the repo rate very soon, possibly by the end of this week, the new rate may be announced. Even before that, both the banks announced to increase the lending rate. The loan will be costlier due to the increase in the lending rate. It is possible to increase the repo rate by 0.35 percent.

ICICI Bank and Indian Bank hike lending rates (indicative picture)

Second largest private sector bank ICICI Bank And the state-run bank, Indian Bank, made its loan expensive on Monday. Both these banks have increased their loan interest rates. According to the announcement on Monday, the lending rate of both the banks has been increased. Rates of almost all term loans have become expensive. After this week, the Reserve Bank can increase the repo rate, in view of this, both the banks have increased their rates.

According to both the banks, the rates of loans for every term have increased on the basis of marginal cost of funds based lending rate ie MCLR. With this move of banks, the EMI of the loan will become expensive, especially the loans taken on the basis of MCLR. Most of the loans are taken at this rate, so the loans will become costlier as the MCLR increases.

Home loan becomes expensive

The new rates of both the banks have become effective from August 1. ICICI Bank’s one-year MCLR has been increased by 15 basis points. It can be called 0.15 percent. After this increase, the minimum MCLR of ICICI Bank became 7.90 percent. This bank will not give loans below this rate. The rate of overnight MCLR has been increased to 7.65%. One year MCLR is important for retail loans as long term loans of banks such as home loans are linked to this rate. Home loan will become costlier due to increase in MCLR.

The meeting of the Monetary Policy Committee of the Reserve Bank is going to be held at the end of this week. It is believed that interest rates can be increased in this meeting. The US central bank has also raised interest rates, after which the possibility of increasing rates in India has increased. Such steps are being taken to control inflation. According to estimates, the Reserve Bank can increase the repo rate by 0.25 percent to 0.35 percent.

new rates of indian bank

On the other hand, Indian Bank, a public sector bank, has also increased the one-year MCLR. Indian Bank has increased the MCLR by 0.10 percent and the new rates have become 7.65 percent. The MCLR for 6 months from overnight has been increased from 6.85 per cent to 7.50 per cent. Along with this, the Treasury Bill Benchmark Linked Lending Rate (TBLR) has also been increased. The rate of TBLR has been increased from 6.10 percent to 6.15 percent for one year to three years. According to Indian Bank, the revised MCLR and TBLR rates will be applicable from August 3.

Last week, finance company HDFC increased its lending rate by 0.25 percent. Simultaneously, Indiabulls Housing Finance increased its reference rate on housing and MSME loans by up to 25 basis points. Its new rates will be 5 August for existing customers and are applicable from 1 August for new customers.

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