Retail loans will now have an interest rate of 7.95%, reflecting a spread of 2.55 over the repo rate. The external benchmark lending rate (I-EBLR) of ICICI Bank is 9.10% per annum per annum. The repo rate is now 5.4%, which is above the level of 5.15 percent before the crisis. In June, retail inflation was 7.01 percent, which was higher than the RBI’s target range of 2 to 6 percent but lower than May’s 7.04 percent.
ICICI Bank, PNB, Bank of Baroda, and Canara Bank have increased their lending rates in response to the RBI’s Monetary Policy Committee (MPC) raising the repo rate by 50 basis points (bps) to reduce inflation in its most recent policy review.
To reflect the increase in the repo rate, lenders have been raising interest rates on both deposits and loans.
Retail loans will now have an interest rate of 7.95%, reflecting a spread of 2.55 over the repo rate, according to the Bank of Baroda. Retail loans from the lender are correlated with the repo rate.
The external benchmark lending rate (I-EBLR) of ICICI Bank is correlated with the policy repo rate of the RBI. I-EBLR is 9.10% per year per year (“per annum payable monthly”). According to a notification from the lender, starting on August 5, 2022,
Canara Bank increased its repo rate-linked lending rate by 50 basis points to 8.30 percent on August 7. For tenures of one year to under three years, PNB’s lending rates range from 7.40 to 7.80 percent.
The lending rates offered by PNB are in the range of 8.00% to 84.0% for tenures of three to five years or less. For those aged five to ten, they range from 8.40 to 8.80 percent.
Its loan rates range from 8.90 percent to 9.30 percent for loan terms ranging from 10 to 15 years.
The MPC increased the repo rate by 50 basis points to 5.4% as part of its policy review on Friday, August 5. The repo rate has risen to 5.4%, surpassing the pre-pandemic level of 5.1%.
The MPC increased the key repo rate by 50 basis points (bps) in its policy review in June, which was the second increase in less than a month after it increased by 40 bps in an off-cycle policy review in May.
Retail inflation in June was 7.01 percent, which is higher than the RBI’s target range of 2 to 6 percent but lower than May’s 7.04 percent.
According to RBI Governor Shaktikanta Das, the south-west monsoon’s spatial and temporal distribution, global financial market trends, and changing geopolitical developments continue to have a significant impact on the inflation trajectory.
However, there has been some let-up in global commodity prices since the last MPC meeting, particularly in prices of industrial metals, and there has been some softening in global food prices, “Das continued.
The government’s supply-side interventions and improved supplies from major producing nations are expected to cause domestic edible oil prices to decline even further.
If it continues, the resumption of wheat supply from the Black Sea region may help to moderate global prices. Despite being high, supply chain pressures are decreasing.
The projected inflation rate for the fiscal year 2022–23 is 6.7%, with Q2 readings of 7.1%, Q3 readings of 6.4%, and Q4 readings of 5.8%, with risks evenly distributed. CPI inflation is anticipated to be 5% in Q1:2023–2024.
