After the Reserve Bank of India (RBI) hiked the repo rate by 50 basis points with immediate effect on September 30, 2022, several banks have increased their loan interest rates. After State Bank of India (SBI), ICICI Bank and HDFC Ltd, now Bank of Baroda and Bank of India have announced a hike in their home loan interest rates.

Bank of Baroda increased RLLR
Bank of Baroda has revised the repo-linked lending rate with effect from October 1, 2022. According to the website, “As per the guidelines issued by the Reserve Bank of India regarding implementation of external benchmark based lending rates. The Bank has introduced Baroda Repo Linked Lending Rate (BRLLR) in respect of all retail loan products with effect from 01.10.2019. Rate of interest on various loans linked to Baroda Repo Linked Lending Rate (BRLLR) – with effect from 01.10.2022. The applicable BRLLR for retail loans is 8.45% w.e.f. 01.10.2022 (Current RBI Repo Rate: 5.90% + Markup / Base Spread 2.55%).”

The bank has not yet announced changes in MCLR and base rate.

Bank of India hikes EBLR, MCLR and base rate
According to Bank of India website, “RBLR is 8.75% as per Revised Repo Rate (5.90%) with effect from 30/09/2022.”

The bank has also increased the MCLR by 10-20 basis points over certain tenors. The latest MCLR rates with effect from October 1, 2022 are given below:

Source: Bank of India Website

The bank has also increased the base rate by 0.20%. “Bank rate of the bank has been revised from 9.00% p.a. 8.80% p.a. With effect from 01.10.2020?,” the bank’s website said.

Why are banks raising interest rates?
Banks have started raising interest rates after the RBI announced a hike in the repo rate in an unscheduled monetary policy announcement in May 2022. Since then the central bank has been in a race to hike rates. RBI has increased the repo rate by 1.90% from 4% to 5.90% with effect from May 2022.