26.8 C
New Delhi
Wednesday 8 April 2020

Home, auto loans to get costlier as banks hike rates

Banks have not been waiting for the RBI decision and have moved ahead with an increase in deposit rates. On Friday, the third largest private lender Axis Bank hiked rates on deposits — by introducing a new tenure of 12 months, 5 days to under 12 months, 11 days— to 7.4%

Editorials

In India

Lockdown to end on schedule, hints PM; list 10 KRAs, union ministers told

Today's meeting of the prime minister with his colleagues in the union ministries raises hope for the economy even amid the apprehension that the nation might not be able to break the chain of the COVID contagion by 14 April

Terrorist links of Tablighi Jamaat include Masood Azhar, Osama bin Laden

Maulana Masood Azhar, the founder of the terrorist group Harkat ul Mujahideen which underwent several name changes to finally become Jaish-e-Mohammed, is not only a member of the Tablighi Jamaat but also a once close associate of Osama bin Laden

MUMBAI: Home and auto loans are set to get costlier as banks have increased their benchmark lending rates. State Bank of India (SBI), Punjab National Bank (PNB) and ICICI Bank Ltd all increased their marginal cost of funds-based lending rate (MCLR) by 10 basis points today just ahead of the Reserve Bank of India’s monetary policy committee (MPC) meeting where it decides on rates.

HDFC, Kotak Bank, Union Bank have also hiked rates. The MPC will announce its decision on 6 June.

The marginal cost of lending rate (MCLR) is reviewed every month by banks and reflects their cost of funds. Following the latest hike, SBI’s one-year MCLR stands at 8.25% versus 8.15% earlier. This is the second rate hike by the bank in 2018.

While HDFC has increased its retail prime lending rate (PLR)— its benchmark for home loans — by 10bps, ICICI Bank also hiked its one-year MCLR + by 10bps to 8.40%.

Following this, HDFC’s home loans will start at 8.5%. The new rates come into effect from 2 June and are due to increase in the cost of wholesale funds.

PNB has hiked one-year MCLR to 8.4% + from 8.3% earlier. Union Bank increased rates by 10bps to 8.45%. But Kotak Bank has increased its one-year MCLR by a sharp 20bps to 8.9%.

Banks have not been waiting for the RBI decision and have moved ahead with an increase in deposit rates. On Friday, the third largest private lender Axis Bank hiked rates on deposits — by introducing a new tenure of 12 months, 5 days to under 12 months, 11 days— to 7.4%.

Another private lender, Mangaluru-based Karnataka Bank, raised rates to 7.25% from 7.10%  on deposits for a period of 1 year to 2 years. Earlier this week, SBI hiked term deposit rates for amounts of less than Rs 1 crore by up to 25bps.

Banks have been increasing deposit rates as loan growth has picked up and deposit growth has been slowing down with continued remonetisation and savings moving into mutual funds. The increase in deposit rates will automatically translate into higher lending rates in coming weeks as the MCLR is computed by taking into account the cost of deposits.

Coronavirus worldwide update, with focus on India, LIVE

Since the facts and figures related to the novel coronavirus disease 2019 (nCOVID-19, COVID-19 or COVID) are changing by the minute, Sirf News has begun this blog to keep the readers updated with information coming from authentic sources

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Articles

China Is Guilty, But How Will World Retaliate?

The attack has to be calibrated as the world has invested heavily in China and that country, in turn, has markets worldwide, making your own economy vulnerable when you take measures against Beijing

Sewa In COVID Times: Living ‘Service Before Self’ Credo

Sewa International volunteers were first off the starting block, setting up non-medical helplines for the four regional areas — West Coast, East Coast, Midwest, and Southwest — for a coordinated national response, where people can call in for assistance

United States & India: Same COVID, Different Prescriptions

The different social structures, experiences in the leaders of the two countries, variation in the degree of political capital, etc make India and the US react differently to the global COVID pandemic

China Is Guilty, But How Will World Retaliate?

The attack has to be calibrated as the world has invested heavily in China and that country, in turn, has markets worldwide, making your own economy vulnerable when you take measures against Beijing

Sewa In COVID Times: Living ‘Service Before Self’ Credo

Sewa International volunteers were first off the starting block, setting up non-medical helplines for the four regional areas — West Coast, East Coast, Midwest, and Southwest — for a coordinated national response, where people can call in for assistance

United States & India: Same COVID, Different Prescriptions

The different social structures, experiences in the leaders of the two countries, variation in the degree of political capital, etc make India and the US react differently to the global COVID pandemic

For fearless journalism

%d bloggers like this: