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 loan at less than 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.(Updating news)