PNB and ICICI hike interest rates

New Delhi, August 06 (H.S.). The impact of the Reserve Bank of India’s (RBI) repo rate hike has started showing on the market. Public sector Punjab National Bank (PNB) and private sector ICICI have increased the external benchmark lending rate (EBLR) by 0.50 per cent. PNB said on Saturday that the EBLR has been increased […]
 


PNB and ICICI hike interest rates

New Delhi, August 06 (H.S.). The impact of the Reserve Bank of India’s (RBI) repo rate hike has started showing on the market. Public sector Punjab National Bank (PNB) and private sector ICICI have increased the external benchmark lending rate (EBLR) by 0.50 per cent.

PNB said on Saturday that the EBLR has been increased by 0.50 percent after the increase in the repo rate by the RBI. After this hike, the interest rate on PNB’s loan will increase from 7.40 per cent to 7.90 per cent. The new EBLR rate of PNB will be applicable from August 8, 2022.

Similarly, ICICI Bank said in a statement that the EBLR standard lending rate of ICICI Bank has been increased in line with the policy rate of RBI. After this hike, ICICI’s EBLR will be 9.10 per cent per annum, payable every month. The interest rate on ICICI Bank loans has come into effect from August 5, 2022. Actually, the bank’s EBLR rate is the rate at which the bank does not give any kind of loan at a lower rate.

What is External Benchmark Lending Rate

Banking regulator RBI had made it mandatory to link all new personal and retail loans with floating rate to an external benchmark with effect from October 1, 2019. The External Benchmark Lending Rate is the minimum rate of interest on a loan, which includes the Reserve Bank’s repo rate. At present, three types of external benchmark rates are running in banks, according to which the interest rates on loans are decided.

It is noteworthy that a day earlier, RBI has increased the policy rate repo rate by 0.5 percent. After this hike, the repo rate has reached a 3-year high of 5.40 percent. The Reserve Bank has increased the repo rate for the third time in the last 93 days. It is believed that the RBI has increased the repo rate in recent days to deal with the rising inflation.