ICICI, BoB, BoI, Central Bank revise lending rates after RBI's repo rate hike

Following the 40 bps hike in reporate, several lenders have increased their external benchmark lending rate (EBLR). Among them, private sector lender ICICI Bank on Thursday revised its lending rate (EBLR) to 8.10 per cent. Meanwhile, state-owned Bank of Baroda (BoB) has raised the rate to 6.90 per cent with immediate effect.

Likewise, two other public sector banks -- Bank of India and Central Bank of India have also raised the repo linked lending rate, a PTI report said.

The Reserve Bank on Wednesday announced hike in the benchmark repo rate-- the short term lending rate it charges to banks-- by 0.40 per cent to 4.40 per cent with immediate effect, aimed at taming the rising inflation caused by the global geopolitical situation. It was an out of turn Monetary Committee Meeting (MPC). 

The increase in the repo by RBI will push up the cost for most of the personal loans, auto and home loans for customers as the new loans post-October 2019 are linked to the repo rate.

RBI policy repo rate effective May 4, 2022, is 4.40 per cent, ICICI Bank said.

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"ICICI Bank External Benchmark Lending Rate (I-EBLR) is referenced to RBI policy repo rate with a mark-up over repo rate. I-EBLR is 8.10 per cent p.A.P.M. Effective May 4, 2022," the bank said.

The EBLR moves up or down in accordance with the movement in the repo rate.

State-owned Bank of Baroda also revised the external benchmark linked lending rate, with effect from May 5, 2022.

"For retail loans applicable BRLLR is 6.90 per cent with effect from May 5, 2022 (current RBI repo rate:4.40 per cent plus mark up of 2.50 per cent)," Bank of Baroda said.

BoB had introduced Baroda Repo Linked Lending Rate (BRLLR) in respect of all retail lending products from October 2019.

Bank of India said the RBLR (Repo Based Lending Rate), with effect from May 5, 2022, is 7.25 per cent as per the revised repo rate (4.40 per cent).

The state-owned Central Bank of India has also revised the RBLR by 0.40 per cent, with effect from May 6.

The revised RBLR of Central Bank of India will be 7.25 per cent plus the credit risk premium (CRP), from the existing rate of 6.85 per cent plus CRP, the lender said.

The country's largest lender State Bank of India (SBI) charges the EBLR at 6.65 per cent plus the credit risk premium, with effect from April 1, 2022.

EBLR is a sum of external benchmark rate (EBR) and credit risk premium (CRP). Last month, SBI hiked the marginal cost-based lending rate (MCLR) by 10 basis points across all tenures.

With the revision, SBI's benchmark one-year MCLR -- against which most of the consumer loans are priced -- increased to 7.10 per cent per annum.

In September 2019, the Reserve Bank had advised all banks to mandatorily link the interest rate to an external benchmark (which is the repo rate) for all new floating rate personal or retail loans as well as for floating-rate loans to MSMEs, with effect from October 1, 2019.