EMI to rise as ICICI Bank raises loan interest rate by 0.15%: Newsdrum

New Delhi: ICICI Bank, the second largest private sector lender, raised lending rates by 0.15% across all maturities on Monday ahead of a rate hike by the RBI later this week.

Rates have been raised across the board as part of the funds-based lending rate (MCLR) incremental cost system, a move that will make EMI expensive for those who have used loans compared to MCLR.

According to the revised rates, effective August 1, the bank’s one-year MCLR increased by 15 basis points or 0.15% to 7.90%, while the overnight MCLR rose to 7 .65%, according to information published on the bank’s website.

The one-year MCLR is considered important from a retail lending perspective because a bank’s long-term loans, such as home loans, are tied to this rate.

The rate hike comes ahead of the RBI’s Monetary Policy Committee (MPC) meeting later this week. The MPC is widely expected to raise interest rates to rein in high inflation.

Last week, mortgage lender HDFC raised its lending rate by 0.25%.

Indiabulls Housing Finance Ltd (IBHFL) also raised its benchmark rates on housing loans and MSME loans by 25 basis points, in line with other players.

The new rates will be applicable for new customers from August 1 and for existing borrowers from August 5.

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