Mumbai: Banks have started increasing their lending rates reserve Bank of India hiking repo rate Half a percentage point on Friday. The rate at which RBI lends to banks is called repo rate. While transmission in lending rates is almost automatic due to linkages with external benchmarks, the rise in deposit rates may slow down as there is surplus liquidity in the system, and most banks want a higher level of credit-deposit ratio for improvement. Margin.

Lenders that have revised their rates include:

, , And . These banks have adjusted the external benchmark rates linked to the repo rate. According to the ICICI Bank website, the External Benchmark Lending Rate (I-BLR) stands at 9.1% as of August 2022. best of private lender home loan Rates are available at 8.1% (Repo Rate + 2.7%).

Bank of Baroda said the best rate under the repo-linked lending rate for AAA-rated entities from August 6 would be 7.6%. According to its website, home loan rates range from 7.95% to 9.3%.

The SBI website shows the old home loan rate starting at 7.55% (effective from June 15, 2022). While the rates for existing borrowers will go up by 50 bps (100 bps = 1 percentage point), the bank is yet to announce the new schedule of rates. The RBI on Friday increased the repo rate from 4.9 per cent to 5.4 per cent.

While these banks have already updated their websites, Rate of interest There will be an increase on all loans linked to the repo rate. About 44% of all banks and most of the incremental home loans are linked to the repo rate. Bankers said they do not expect a rate hike to impact credit demand, which has been rising after a two-year Covid-induced slowdown.

Declaring its result on Saturday,

Chairman Dinesh Khara said he expects credit growth to grow at 15% during the current fiscal. The bank is not aggressively raising deposits as its credit-deposit ratio stands at 63%, which gives it an opportunity to grow its loan book. VC and CEO Keki Mistry also said that he did not expect a decline in home loan demand due to the hike in rates.

According to the RBI, the change in the repo-linked rate has accelerated the transmission of monetary policy action. “A survey of select banks showed that 20% of the loan book linked to the external benchmark-linked rate has a lower reset frequency than the underlying benchmark. In case of private banks, more than one-third of advances are at fixed rates, which may experience unrealized losses by way of reduction in the net present value of future cash flows in a rising interest rate cycle,” the RBI said in its financial statement. is reported in June 2022