ICICI Bank External Benchmark Lending Rate (I-EBLR) is referenced to RBI policy repo rate with a mark-up over repo rate, ICICI Bank said in a notification.
The one-year MCLR now stands at 8.30 per cent, as per the information posted on the bank’s website. The lenders are free to decide the spread over the external benchmark as well as to offer such external benchmark-linked loans to other types of borrowers as well.
ICICI Bank and India Bank raised their benchmark lending rate by up to 35 basis points which will make loans costlier for the borrowers.
Private sector lender ICICI Bank increased the Marginal Cost of Funds based Lending Rates (MCLR) across tenure by 20 basis points effective November 1. The one-year MCLR now stands at 8.30 per cent, as per the information posted on the bank’s website.
Similarly, the six-month MCLR is now 8.25 per cent. Public sector lender Indian Bank raised the overnight MCLR by 35 basis points to 7.40 per cent.
The Asset Liability Management Committee (ALCO) of the bank has reviewed the MCLR and the new rates are effective from November 3, Indian Bank said in a regulatory filing. The one-year MCLR rate has been increased to 8.10 per cent.
PNB in its regulatory filing said, “Consequent upon an increase in repo rate by RBI, the Repo Linked Lending Rate (RLLR) has been revised from 7.40 per cent to 7.90 per cent with effect from August 8, 2022.”
According to the RBI directions, the interest rate under the external benchmark is supposed to reset at least once in three months.
Subsequently, from October 1, 2019, all new floating rate personal and retail loans (housing, auto), and floating rate loans to Micro and Small Enterprises by banks were linked to an external benchmark (repo) rate.
Hence, Banks can take the external benchmark as the RBI’s repo rate or the government’s treasury bill-based yields published by the Financial Benchmarks India Private Ltd (FBIL) or any other benchmark market interest rate published by FBIL.
It must be noted that earlier this month, ahead of RBI policy rate announcement, the ICICI bank had revised the marginal cost of funds-based lending rate (MCLR) by 0.15 per cent across all tenors.
(The writer is CEO, Track2Realty)
Ravi Sinha is a journalist with nearly two decades of cross-discipline media exposure. He is the CEO of real estate think-tank group Track2Realty. He has been writing extensively on the real estate sector for nearly a decade. Evaluation of real estate brand performance is his expertise and he has immense insight into consumers’ psychograph in the property market.
Twitter: https://twitter.com/ravitrack2media
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