HDFC, PNB and ICICI Bank increase their lending rates
Mortgage company HDFC Ltd, Punjab National Bank (PNB) and ICICI Bank announced an increase in their lending rates on Wednesday.
HDFC increased its retail prime rate (RPLR) on home loans, PNB and ICICI Bank announced hikes in their marginal cost-based lending rates (MCLR), resulting in higher EMIs for borrowers. The upward revision of rates will essentially lead to higher EMIs for borrowers. This is the third time HDFC has increased its RPLR in the past month. In May, it raised rates twice for a total of 35 basis points.
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The Reserve Bank of India raised the repo rate – at which it lends short-term money to banks – by 0.40% to 4.40%.
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HDFC raised the RPLR for home loans by 5 basis points. The rate on home loans up to Rs30 lakh will be 7.15% (7.10% for women) and 7.40% for loans between Rs 30 lakh and Rs 75 lakh. The revision would come into effect from today. “HDFC is increasing its RPLR on home loans, on which its adjustable rate home loans (ARHL) are benchmarked, by 5 basis points, effective June 1, 2022,” the company said in a statement.
PNB said it increased its marginal cost of funds-based lending rate by 15 basis points or 0.15% for all mandates. The new rates take effect June 1, PNB said in a regulatory filing.
According to PNB, with the revision, the one-year MCLR rose to 7.40%, from 7.25% previously. Most loans are tied to the one-year MCLR rate. The overnight, one-month and three-month MCLR increased by 15 basis points to 6.75%, 6.80% and 6.90%, respectively, while the six-month MCLR increased to 7 .10%. At the same time, the three-year MCLR increased by 0.15% to 7.70%.
ICICI Bank has also revised the marginal cost of funds-based lending rate with effect from June 1, 2022, according to its website. In addition, the Bank of India has also increased the incremental cost of funds based lending rate over a certain duration with effect from June 1, 2022.
According to bankers, interest rates are likely to rise further as the RBI is expected to raise the Repo rate further as part of the June monetary policy.