The Reserve Bank on Wednesday announced an increase in the benchmark repo rate – the short-term lending rate charged by banks – by 0.40 percent to 4.40 percent with immediate effect.
Following the RBI’s boost in the key repo rate, private sector lender ICICI Bank upped its external benchmark lending rate (EBLR) to 8.10 percent, and state-owned Bank of Baroda raised its rate to 6.90 percent with immediate effect. have made. Similarly, two other public sector banks – Bank of India and Central Bank of India – have also increased the repo-linked lending rate.
Ahead of the Monetary Committee meeting (MPC), the Reserve Bank on Wednesday announced an increase in the benchmark repo rate – the short-term lending rate charged by banks – from 0.40 percent to 4.40 percent with immediate effect, with an aim to captivate the interest rate. Rising inflation due to the global geopolitical situation.
The increase in repo by RBI will increase the cost of most personal loans, auto, and home loans for customers as new loans after October 2019 are linked to the repo rate.
In a statement, the bank stated, “ICICI Bank External Benchmark Lending Rate (I-EBLR) is referred to RBI Policy Repo Rate with a mark-up on the repo rate.” With effect from May 4, 2022, the I-EBLR is 8.10 percent. is efficient.” In response to fluctuations in the repo rate, the EBLR swings up and down.
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With effect from May 5, 2022, the state-owned Bank of Baroda also revised the external benchmark linked lending rate. “The applicable BRLLR for retail loans is 6.90 percent with effect from May 5, 2022 (an increase of 2.50 percent over current RBI repo rate: 4.40 percent),” Bank of Baroda said.
With effect from October 2019, the Baroda Repo Linked Lending Rate (BRLLR) was launched by BoB for all retail lending products. Bank of India said that the RBLR (repo-based lending rate), with effect from May 5, 2022, stands at 7.25 percent. Revised repo rate (4.40 percent).
The state-owned Central Bank of India has also increased the RBLR by 0.40 percent with effect from May 6. The revised RBLR of the Central Bank of India will be 7.25 percent plus Credit Risk Premium (CRP) from the existing rate. CRP over 6.85 percent, the lender said.
With effect from April 1, 2022, the country’s largest lender, State Bank of India (SBI), would impose EBLR as a credit risk premium of over 6.65%.
EBLR is the sum of the external benchmark rate (EBR) and credit risk premium (CRP). SBI increased the marginal cost-based lending rate (MCLR) by 10 basis points across the board last month.
With the revision, SBI’s benchmark one-year MCLR – against which most consumer loans are priced – rose to 7.10 percent per annum.
The Reserve Bank of India urged all banks in September 2019 to compel all new floating rate personal or retail loans, as well as floating-rate rates for MSMEs, to be fixed using an external benchmark (the repo rate). Compulsory link to loan From October 1, 2019.
