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Lending will get expensive as ICICI bank and Indian bank lending rates rise

ICICI Bank’s one-year MCLR rose 15 basis points or 0.15% to 7.90%.

New Delhi:

ICICI Bank, India’s second-largest private sector lender and state-owned bank, raised lending rates across all maturities on Monday ahead of a rate hike by the RBI later this week.

Rates have been raised across the board as part of the Funds Based Lending Rate (MCLR) incremental cost system, a move that will make EMIs expensive for those who have used loans compared to the MCLR.

Under the revised rates, effective August 1, ICICI Bank’s one-year MCLR rose 15 basis points or 0.15% to 7.90%, while overnight MCLR rose to 7.65%, according to information published on the bank’s website.

The one-year MCLR is considered important from a retail lending perspective because a bank’s long-term loans, such as home loans, are tied to this rate.

The rate hike comes ahead of the RBI’s Monetary Policy Committee (MPC) meeting later this week. The MPC is widely expected to raise interest rates to rein in high inflation.

Later in the day, state-owned Indian Bank announced a revision to its one-year MCLR to 7.65%, up 0.10% from the current rate.

Other duration MCLRs, overnight to 6 months, were revised up to 6.85 – 7.50%, Indian Bank said.

It also revised the TBLR (Reference rate linked to Treasury bills) from more than one year to a duration less than or equal to 3 years to 6.15% against 6.10%, among others.

He said the revised MCLR and TBLR would come into effect on August 3.

“The other existing benchmark rates, namely the repo rate, RBLR, base rate and BPLR, remain unchanged,” he added.

Last week, mortgage lender HDFC raised its lending rate by 0.25%.

Indiabulls Housing Finance Ltd (IBHFL) also raised its benchmark rates on housing and MSME loans by 25 basis points, in line with other players.

The new rates will be applicable for new customers from August 1 and for existing borrowers from August 5.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)


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