ICICI Bank, Bank of India, Indian Bank and Indiabulls Housing Finance raised their lending rates on Monday, acting ahead of the Monetary Policy Committee (MPC) meeting scheduled for later this week.
ICICI Bank increased its marginal cost of funds-based lending rate (MCLR) by 15 basis points across all tenors. The overnight and one-month MCLR now stands at 7.65%; three-month MCLR at 7.70%; six-month MCLR at 7.85%; and the one-year MCLR of 7.90%.
Bank of India raised its MCLR by 10 basis points across all durations, bringing its overnight MCLR to 6.80%; 1 month MCLR at 7.30%; three-month MCLR at 7.35%; six-month MCLR at 7.45%; 1-year MCLR at 7.60%; and three-year MCLR at 7.80%.
Another public sector lender, Indian Bank, raised its MCLR by 10 to 20 basis points on all maturities, starting Aug. 3. As a result, the overnight MCLR now stands at 6.85%; 1 month MCLR at 7.15%; three-month MCLR at 7.25%; six-month MCLR at 7.50%; and one-year MCLR at 7.65%.
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Mortgage financier Indiabulls Housing Finance also raised lending rates by 25 basis points. The revised rates will be effective from August 1 for new borrowers while for existing borrowers the new lending rates will be effective from August 5.
“Indiabulls Housing Finance Ltd. is revising its benchmark rates on housing loans and MSME loans by 25 basis points in line with recent revisions by other major housing lenders and banks,” it said in a statement on Monday. stock exchange notification.
Last week, HDFC raised home lending rates by 25 basis points, its fifth hike in the past two months. The mortgage lender has raised rates by 115 basis points since May this year.
Revised rates for new borrowers range between 7.80% and 8.30%, depending on credit and loan amount. The current range is 7.55% to 8.05%. For existing customers, rates will increase by 25 basis points or (0.25%).
HDFC has moved from resetting quarterly for individual loans to resetting monthly to reduce the impact of pass-through rate changes. Its net interest income and net interest margin were impacted in the first quarter as central bank actions on interest rates impacted the lender’s cost of borrowing without simultaneous transmission on the side of the asset.
Last week, Kolkata-based Bandhan Bank raised its MCLR from 18 to 88 basis points, effective July 30. Therefore, the overnight, one-month and three-month MCLR amounts to 8.49%; six-month MCLR at 9.09%; MCLR 1 year at 9.45%; 2-year MCLR at 9.78%; and 3-year MCLR at 10.06%.
The MPC has raised benchmark interest rates by 90 basis points this year, bringing the repo rate to 4.90%. It had raised the interest rate by 40 basis points in May and followed it with a hike of 50 basis points in June. It is widely believed that the six-member committee is likely to announce a repo rate hike of 35 to 50 basis points in its policy statement on August 5 in a bid to tackle high inflation.
With headline inflation well above the RBI’s tolerance limit of 2-6%, another rate hike on Aug. 5 is seen as a certainty by economists and market participants.
The latest data showed headline retail inflation was 7.01% in June, marking the sixth month in a row that the price gauge was above the RBI-mandated zone.