As RBI’s Monetary Policy Committee (MPC) raised key repo rates last week, banks have started increasing their interest rate offerings for loans and deposits. Many lenders, including ICICI Bank, HDFC and Punjab National Bank Home Loan Interest Rates,
Housing Development Finance Corporation (HDFC) has hiked lending rates by 50 basis points. The new lending rate will come into effect from June 10, the mortgage lender said in a regulatory filing. HDFC has increased its Retail Prime Lending Rate (RPLR) on housing loans, benchmarking its Adjustable Rate Home Loans (ARHL) by 50 basis points, with effect from June 10, 2022.
ICICI Bank last week also raised its external benchmark lending rate by 50 bps to 8.60 per cent. “ICICI Bank External Benchmark Lending Rate” (I-EBLR) refers to the RBI Policy Repo Rate with Mark-up on Repo Rate. The i-EBLR is 8.60 per cent ppm with effect from June 8, 2022,” the private lender said on June 9.
Bank of Baroda has also increased its interest rates on various loans linked to the Baroda Repo-Linked Lending Rate (BRLLR) with effect from June 9. “The applicable BRLLR for retail loans is 7.40 per cent from 09.06.2022 (current RBI repo rate: 4.90 per cent + mark-up-2.50 per cent), SP0.25 per cent,” according to its website.
The repo-linked lending rate (RLLR) of Punjab National Bank has also increased and will now be 7.40 per cent, with effect from June 9, while Bank of India Rates were also revised. According to Bank of India website, “RBLR is 7.75 per cent as per Revised Repo Rate (4.90 per cent) with effect from 08/06/2022.”
Last week, the MPC raised the key repo rate by 50 basis points to 4.90 per cent to control inflation. It also decided to focus on the return of housing to ensure that inflation remains within the target while supporting growth going forward.
The RBI has also raised its retail inflation forecast for the current fiscal year 2022-23 by 100 basis points to 6.7 per cent, from 5.7 per cent estimated earlier. Retail inflation stood at an eight-year high of 7.79 per cent in April. However, the central bank has the right to keep it in the range of 2-6 per cent.
Experts now believe that the MPC will be hiked further in the coming months and the repo rate is likely to remain at 5.75 per cent by the end of the current financial year.
Sunil Kumar Sinha, Principal Economist, India Ratings and Research, said with the Russia-Ukraine conflict, the prospects of a rise in global commodity prices are looming and the supply-side disruptions do not seem likely to end. In the near future.
Looking at RBI’s inflation projections of 7.5 per cent in 1QFY23, 7.4 per cent in 2QFY23, 6.2 per cent in 3QFY23 and 5.8 per cent in 4QFY23, Ind-Ra believes that there is yet another 25-50 bps hike in the policy. Chances are. The rate in FY23 and the repo rate hike in this cycle could go up to 6 per cent,” Sinha said.