More burden is going to increase on the pocket of common man. Recently RBI has increased the repo rate, due to which many types of loans are going to be expensive. Many banks have increased their interest rates. This will also increase the EMI burden. Banks and financial institutions have started increasing interest rates after the central bank increased the repo rate by 50 basis points this week. This has made home, auto and personal loans costlier. After the increase in the repo rate, ICICI Bank, Bank of Baroda, PNB, Bank of India, Indian Bank, Indian Overseas Bank and HDFC Ltd have increased the loan rates.
what is repo rate
Repo rate is the rate at which RBI lends to banks to meet their short-term requirements. After a hike in the repo rate, banks raise the loan rates immediately but do not increase the rates of deposits quickly. Experts say that banks do this for maximum profit. Sometimes the interest rates on deposits are increased less than the prescribed limit.
Which bank increased the rate of interest
1. Indian Bank has increased the interest rate to 7.75 percent and Indian Overseas Bank to 7.75 percent. 2. Bank of Maharashtra has increased the loan rates from 7.20 percent to 7.70.
3. ICICI Bank has increased the repo based external benchmark lending rate by 50 basis points to 8.60 per cent from 8.10 per cent.
4. PNB has increased the repo based lending rate from 6.90 percent to 7.40 percent and Bank of Baroda has also increased it to 7.40 percent.
5. HDFC Ltd has increased the home loan rates by 0.50 percent. Due to this, Rs 31 more will have to be paid per lakh on the loan of 20 years.
6. SBI has increased the external benchmark lending rate to 7.05 per cent even before the hike in the repo rate. Credit risk premium is also included with this rate.
Posted By: Navodit Saktawat