ICICI Bank, the second largest private sector lender and state-owned Indian bank, on Monday raised its lending rates for all periods in anticipation of a rate hike by the RBI later this week.
The rates have been hiked for all tenors under the fund’s marginal cost-based lending rate (MCLR) system, a move that will make EMIs costlier for borrowers benchmarked against the MCLR.
Under the revised rates, effective August 1, ICICI Bank’s one-year MCLR has increased by 15 basis points, or 0.15 per cent, to 7.90 per cent, while the overnight MCLR has increased to 7.65 per cent, according to information posted on the bank’s website.
The one-year MCLR is considered important from the point of view of retail loans, as bank’s long-term loans such as home loans are linked to this rate.
The rate hike comes ahead of the RBI’s Monetary Policy Committee (MPC) meeting later this week. It is widely expected that the MPC will increase interest rates to overcome high inflation.
Later in the day, state-owned Indian Bank announced an increase in its one-year MCLR by 0.10 per cent from the current rate to 7.65 per cent.
Indian Bank said the other tenor MCLR, from overnight to 6 months, has been revised to 6.85 – 7.50 per cent.
It also revised the TBLR (Treasury Bill Benchmark Linked Lending Rate) for more than 1 year to 6.15 per cent from 6.10 per cent with less than or equal to 3-year period.
It said that the revised MCLR and TBLR will be effective from August 3.
“Other existing benchmark rates, policy repo rate, RBLR, base rate and BPLR remain unchanged,” it added.
Last week, mortgage lender HDFC increased its lending rate by 0.25 per cent.
Indiabulls Housing Finance Limited (IBHFL) also raised its reference rates on housing and MSME loans by 25 basis points, in line with other players.
The new rates will be applicable from August 1 for new customers and for existing borrowers from August 5.
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