In order to control the skyrocketing inflation, the RBI has increased the repo rate by 0.50 percent on Wednesday. Now banks will also make home, auto and various types of loans expensive. This will have a direct impact on the common people. Not only will it become expensive for them to buy a house and a car, but they will also have to pay higher monthly installments (EMIs).
Suppose, you have taken a home loan of 30 lakhs for a tenor of 20 years, then now your EMI will increase by Rs 905.4 every month as compared to May. Every year you will incur a loss of Rs 10,864.80. If you have taken a loan of Rs 5 lakh for 5 years to buy a car, then after this increase in the repo rate, you will have to pay an additional monthly installment of Rs 122 every month. In a year, this amount will increase by Rs 1,464.
cad at permanent level
The current account deficit (CAD) will remain at a permanent level. This had increased to 2.7% of GDP in the third quarter of 2021-22. There has been an increase in the country’s imports and exports during this period.
Understand in this way … the burden on your pocket will increase every month
home loan
loan amount | 30 million |
After the repo rate hike in May | at 6.90 percent |
EMI | 23,079.30 |
After increasing the repo rate by 0.50 percent | at 7.40 per cent |
EMI | 23,984.70 |
Figures in Rupees, Loan Tenure : 20 Years
car loan
loan amount | 5 lakh |
After the repo rate hike in May | at 8.90 per cent |
EMI | 10,355 |
After increasing the repo rate by 0.50 percent | at 9.40 per cent |
EMI | 10,477 |
Figures in Rupees, Loan Tenure : 5 years
Government is cautious about inflation: Governor
RBI Governor Shaktikanta Das said that the government is conscious about the current situation of inflation. Steps will be taken keeping in view the upcoming circumstances regarding the policy rate. Now the government has to further decide on those supply side measures which they consider necessary. It is not the job of the central bank to consider or comment on what the exact measures might be. Das said the central bank will ensure availability of sufficient cash to meet the productive needs of the economy. In terms of economic growth, sufficient cash will be available with the banks for lending.
- The governor said the central bank has changed the policy stance from terminology to ‘maintaining a liberal stance’ from ‘withdrawal of stimulus measures’.
- There is a constant dialogue between the government and the RBI on every issue. This also includes issues such as cryptocurrencies.
- RBI Deputy Governor T Rabi Shankar said that the central bank will implement the government’s announcement with the introduction of digital currency by the end of the financial year.
Complain to the police about the unregistered app giving digital loans
Das said, customers who have taken loans from unregistered apps giving digital lending should contact the local police in case of any problem. Such apps are not registered with RBI. He is self driven. The central bank will take action only against registered entities. The list of such entities is on the RBI website.
India in better position than other countries: CEAChief Economic Adviser (CEA) Anantha Nageswaran said the fundamentals of the economy are strong in the medium term. India is in a better position to deal with economic challenges than other countries. He said, if you look at the current concern about inflation, India has come out of the last decade on the basis of the financial system. The books of accounts of banks and the financial sector have improved. The position of the corporate sector has also improved.
The RBI and the government are taking steps to control inflation and boost growth. There are challenges domestically, due to the global situation. Necessary steps are taken to meet the challenges. Ajay Seth, Secretary, DEA
Government policies helped in recovering from the epidemic: Finance Minister
Finance Minister Nirmala Sitharaman said that the government’s policies and proactive steps have helped the country to overcome the situation arising out of the pandemic. These steps include measures such as reduction in corporate tax, GST, IBC code and digitization of the economy. Speaking at the special week celebrations under the Amrit Mahotsav of Independence, he said that India, with its strong infrastructure, faced many challenges and succeeded. He said that despite the Corona pandemic in the last two years, Indian retail investors have found online means to access the stock market. Markets regulator SEBI has played an important role in investor education.
Increase in interest rates will affect the sale of houses: Industry
Increase in repo rate may affect the sale of houses. Realty industry said, with half a per cent hike in interest rates and 0.4% increase in May, home loans will become costlier by 0.90 per cent. With this people can postpone the decision of buying a house.
However, interest rates are much lower since the 2008 global financial crisis. At that time the interest rate used to be 12 percent, which is now around 7 percent. In the housing sector, people still do not invest money as an investment, but insist on buying a house to live in. Anuj Puri Chairman, Anarock
The impact of costlier home loans, rising cost of development of the property and price pressures will affect the sentiment of home buyers. -Shishir Baijal, Chairman, Knight Frank
Bankers appreciate the decision to hike repo rate
The hike in policy rates is a broad assessment of rising uncertainties. Linking of RuPay Credit Card with UPI will facilitate customers with financial inclusion. -Dinesh Khara, President, SBI
The increase in the repo rate is in line with expectations. Inflation forecast for all quarters is above 5%. Therefore, it is necessary to stabilize the prices. -AK Goyal, Chairman, IBA
Repo rate to reach 5.75 percent by March
SBI says that by March 2023, RBI can increase the repo rate to 5.75. This will be equal to the pre-corona level. Repo rate may increase to 5.25 per cent in August and 5.5 per cent in October.
This step was necessary to strike a balance between inflation and growth. However, there is still plenty of liquidity in the banking system. Sunil Kumar Sinha Chief Economist, India Ratings
Keeping in view inflation, further increase in key policy rates is expected. The repo rate may increase by 0.35 and 0.25 per cent in the next two meetings of the MPC. Aditi Nair, Chief Economist, ICRA
In order to control the skyrocketing inflation, the RBI has increased the repo rate by 0.50 percent on Wednesday. Now banks will also make home, auto and various types of loans expensive. This will have a direct impact on the common people. Not only will it become expensive for them to buy a house and a car, but they will also have to pay higher monthly installments (EMIs).
Suppose, you have taken a home loan of 30 lakhs for a tenor of 20 years, then now your EMI will increase by Rs 905.4 every month as compared to May. Every year you will incur a loss of Rs 10,864.80. If you have taken a loan of Rs 5 lakh for 5 years to buy a car, then after this increase in the repo rate, you will have to pay an additional monthly installment of Rs 122 every month. In a year, this amount will increase by Rs 1,464.
cad at permanent level
The current account deficit (CAD) will remain at a permanent level. This had increased to 2.7% of GDP in the third quarter of 2021-22. There has been an increase in the country’s imports and exports during this period.
Understand in this way how much will increase every month, the burden on your pocket
home loan
loan amount | 30 million |
After the repo rate hike in May | at 6.90 percent |
EMI | 23,079.30 |
After increasing the repo rate by 0.50 percent | at 7.40 per cent |
EMI | 23,984.70 |
Figures in Rupees, Loan Tenure : 20 Years
car loan
loan amount | 5 lakh |
After the repo rate hike in May | at 8.90 per cent |
EMI | 10,355 |
After increasing the repo rate by 0.50 percent | at 9.40 per cent |
EMI | 10,477 |
Figures in Rupees, Loan Tenure : 5 years