ICICI Bank, PNB, Bank of Baroda, Canara Bank Raise Loan Rates
ICICI Bank, PNB, Bank of Baroda, Canara Bank Raise Loan Rates
Lenders have been raising interest rates on both deposits and loans to pass on the repo rate hike

After the RBI’s Monetary Policy Committee (MPC) in its latest policy review hiked the repo rate by 50 basis points (bps) to control inflation, ICICI Bank, PNB, Bank of Baroda, Canara Bank have raised their lending rates. Lenders have been raising interest rates on both deposits and loans to pass on the repo rate hike.

Bank of Baroda said retail loans will now have an interest rate of 7.95 per cent, reflecting a spread of 2.55 per cent over the repo rate. The lender’s retail loans are liked to the repo rate.

ICICI Bank’s external benchmark lending rate (I-EBLR) is linked to the RBI’s policy repo rate. “I-EBLR is 9.10 per cent p.a.p.m. effective August 5, 2022,” the lender said in a notification.

Canara Bank has hiked its repo rate-linked lending rate by 50 bps to 8.30 per cent, effective August 7. PNB’s lending rates are between 7.40 per cent and 7.80 per cent for tenures of one year to less than three years.

For tenures of three years to less than five years, PNB’s lending rates are in the range of 8.00-8.40 per cent. For five years to less than 10, they are in the range of 8.40-8.80 per cent. Its loan rates for tenures of 10 years to less than 15 years are in the range of 8.90-9.30 per cent.

The MPC in its policy review on Friday (August 5) hiked the repo rate by 50 bps to 5.4 per cent, the third time increase in a row. The repo rate of 5.4 per cent has now crossed the pre-pandemic level of 5.15 per cent.

In its policy review in June, the MPC had raised the key repo rate by 50 basis points (bps), which was the second hike within almost a month after it increased 40 basis points in an off-cycle policy review in May. The retail inflation in June stood at 7.01 per cent, which is slightly lower than the 7.04 per cent recorded in May but is higher than the RBI’s target limit of 2-6 per cent.

On inflation, RBI Governor Shaktikanta Das said the inflation trajectory continues to be heavily contingent upon the evolving geopolitical developments, international commodity market dynamics, global financial market developments and the spatial and temporal distribution of the south-west monsoon.

Das added, “Since the last MPC meeting, however, there has been some let-up in global commodity prices – particularly in prices of industrial metals – and some softening in global food prices. Domestic edible oil prices are expected to soften further on the back of improving supplies from key producing countries and the government’s supply-side interventions. The resumption of wheat supply from the Black Sea region, if it sustains, could help to temper international prices. Supply chain pressures, though elevated, are on an easing trajectory.”

Inflation for the financial year 2022-23 is projected at 6.7 per cent, with Q2 at 7.1 per cent; Q3 at 6.4 per cent; and Q4 at 5.8 per cent, with risks evenly balanced. CPI inflation for Q1:2023-24 is projected at 5.0 per cent.

Read the Latest News and Breaking News here

What's your reaction?

Comments

https://kapitoshka.info/assets/images/user-avatar-s.jpg

0 comment

Write the first comment for this!