RBI policy effects on Loan rates/Interest Rates.
RBI: The bank has been extremely judicious in their decision to raise repo rate by 35 bps as against the previous revisions, which were much sharper. Lending rates of banks are expected to go up as the cost of funds is expected to rise further. EMIs on vehicle, home and personal loans will also rise.
The external benchmark linked lending rate (EBLR) of banks will rise by 35 bps. One basis point is one hundredth of a percentage point, and as such loans are linked to the Repo rate. As much as 43.6 per cent of the total loans are now linked to the Repo rate.
According to the RBI, the weighted average lending rates (WALRs) on fresh and outstanding rupee loans have increased by 117 bps and 63 bps, respectively, during the period May to October 2022.
On the deposit side, the weighted average domestic term deposit rate on fresh and outstanding deposits increased by 150 bps and 46 bps, respectively, during the same period. “We are keeping a close watch on this process of transmission,” Das said.
Currently, the policy repo rate is around 5.90%. The standing deposit facility (SDF) rate stands adjusted to 5.65% and the marginal standing facility (MSF) rate and the Bank Rate to 6.15%. MCP remains focused on the withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth.
Also read: RBI Set To Raise Rates: RBI Monetary Policy
Currently rates offered by banks:
SBI is currently offering home loan rates as low as 8.40% under its festive offer. The bank is giving a concession of 15 basis points to 30 basis points on its home loans from 4 October 2022 to 31 January 2023. The bank’s festive campaign offer, the rates are cheaper from 8.40% to 9.05%. There are zero processing fees on SBI’s regular and top-up home loans.
The HDFC bank’s rates are 8.60% to 9.10% for women salaried borrowers on home loans up to Rs 30 lakh, the rate is between 8.60% to 9.10% for self-employed. The Bank’s retail prime lending rate is 17.95%.On home loans between Rs 30.01 lakh to Rs 75, salaried women borrowers will pay rates ranging from 8.85% to 9.35%, while self-employed to pay 8.85% to 8.35%. Meanwhile, on home loans from Rs 75.01 lakh and above, the rate is 8.95% to 9.45% for women and 9.00% to 9.50% for other categories either salaried or self-employed.
