On Saturday, the country's largest mortgage lender - HDFC - increased its benchmark lending rate by 25 basis points, a move that will make loans dearer for both existing and new borrowers
Banking and non-banking finance companies have increased interest rates on loans ahead of the Reserve Bank of India's monetary policy decision due later this week. The country's second largest private lender - ICICI Bank raised interest rates on Marginal Cost of Funds Based Lending Rate (MCLR) loans by 15 basis points across tenors with effect from August 1.
The bank has raised overnight MCLR interest rate to 7.65 per cent from 7.5 per cent earlier. One month MCLR interest rate has been increased to 7.65 per cent and interest rate on three months, six months and one year MCLR interest rate has been hiked to 7.7 per cent, 7.85 per cent and 7.9 per cent respectively.
State-run lender - Bank of India - has also increased MCLR interest rate on loans with effect from August 1. The overnight MCLR interest rate has been increased to 6.8 per cent, one month MCLR rate has been advanced to 7.3 per cent, three months MCLR interest rate is revised to 7.35 per cent, six months interest rate has been increased to 7.45 per cent, one year interest rate has been hiked to 7.6 per cent and three years MCLR interest rate has been hiked to 7.8 per cent, according tro Bank of India's website.
Gurugram-based non-banking finance company - Indiabulls Housing Finance has also revised its interest rates by 25 basis points across tenors in line with interest rate hikes undertaken by various banks, the company said in a regulatory filing to stock exchanges.
"Indiabulls Housing Finance Ltd. (IBHFL) revises its reference rates on Housing Loans and MSME Loans by 25 basis points in line with other leading Home Loan lenders and banks recent revisions. The new rates will be applicable for new customers from 1st August onwards, and for existing borrowers from 5th August onwards," the company said in an exchange notification on Sunday.
On Saturday, the country's largest mortgage lender - HDFC - increased its benchmark lending rate by 25 basis points, a move that will make loans dearer for both existing and new borrowers.
"HDFC increases its Retail Prime Lending Rate (RPLR) on housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 25 basis points (bps), with effect from August 1, 2022," the housing finance company said in a statement.
This is the fifth hike effected by HDFC in two months. In all rate has been increased by 115 basis points since May this year.
The revised rates for new borrowers range between 7.80 per cent and 8.30 per cent, depending on credit and loan amount. The existing range is 7.55 per cent to 8.05 per cent.
The rate hike decision by banks and non-banking finance companies come ahead of the RBI's monetary policy decision in which it is widely expected to increase repo rate by 35-50 basis points to keep inflation under check which has been above its tolerance level of 6 per cent for last six months.
The existing repo rate of 4.9 per cent is still below the pre-Covid level of 5.15 per cent. The central bank sharply reduced the benchmark rate in 2020 to tide over the crisis created by the pandemic outbreak.
Experts are of the view that the Reserve Bank of India (RBI) would raise the benchmark rate to at least the pre-pandemic level this week and even further in later months.
(With PTI inputs)