After the announcement of RBI, these banks got a setback, loans will be expensive

The Reserve Bank of India (RBI) has increased the interest rate by 0.50 percent after the MPC meeting. Its effect starts showing after a day. Private sector bank ICICI Bank has increased the interest rates of loans. At the same time, State Bank Punjab National Bank has also increased the interest rate of the loan. […]
 


After the announcement of RBI, these banks got a setback, loans will be expensive

The Reserve Bank of India (RBI) has increased the interest rate by 0.50 percent after the MPC meeting. Its effect starts showing after a day. Private sector bank ICICI Bank has increased the interest rates of loans. At the same time, State Bank Punjab National Bank has also increased the interest rate of the loan. On Friday, RBI Governor Shaktikanta Das raised the repo rate by 0.50 per cent to 5.40 per cent.

I-EBLR . Increase

ICICI Bank said in a notification that it has linked the external benchmark lending rate (I-EBLR) with the hike in the repo rate of the Reserve Bank. ICICI Bank said that the i-EBLR has now increased to 9.10 per cent per annum or monthly. The new rates have come into effect from 5 August 2022. State-owned bank Punjab National Bank has increased the lending rate relative to the repo rate. This will make the loan costlier. EBLR is the interest rate below which banks do not allow loans.

PNB hikes repo linked lending rate

Punjab National Bank (PNB) has reduced the external benchmark repo linked lending rate (RLLR) to 7.90 per cent. PNB said in a regulatory filing that the repo linked lending rate has been increased from 7.40 per cent to 7.90 per cent following the hike in the repo rate by the Reserve Bank. The new rates will be applicable from 8 August 2022.

Earlier this month, ICICI Bank had revised the MCLR before the RBI announced a hike in the repo rate. Banks keep their lending rates linked to the repo rate. Because of this, the change in the repo rate affects the interest of the loan.

trying to control inflation

The central bank has increased the repo rate to control inflation. Retail inflation has been consistently above 7 per cent. Reserve Bank Governor Shaktikanta Das said that inflation is at a record level across the world. India is facing high rate of inflation. June was the sixth consecutive month that retail inflation exceeded the Reserve Bank’s upper limit.