MUMBAI: Hours after RBI hiked rates at which it lends to commercial banks, the ICICI Bank, Bank of India and Federal Bank raised their EMIs on floating rate home loans with immediate effect. A day after, on Thursday, Punjab National Bank, Bank of Baroda followed suit.
On the flip side, Kotak Mahindra Bank gave investors relief by raising deposit rates. ICICI Bank hiked its external benchmark lending rate by 50 bps to 8.6%. This would raise the EMI on a Rs 30 lakh home loan, payable over 20 years, to Rs 26,244.88 from Rs 25,280.23.
Bank of India raised its external benchmarked rate to 7.75% while RBL Bank raised it to 10%. Bank of Baroda increased its repo linked rate to 7.4%. PNB raised its repo linked lending rate to 7.4% from 6.9%. Federal Bank raised home loan rates up to Rs 30 lakh for the salaried class to 8.55% and to 8.6% for those in the Rs 30-75 lakh bracket. HDFC Ltd, too, increased its prime lending rate on housing loans by 50 basis points with effect from June 10.
For many borrowers, their obligations will only rise. This is because the share of exter nal benchmark linked loans in total outstanding loans of scheduled commercial banks has risen to almost 40% while the share of loans linked to the base rate and MCLR, an internal benchmark, has declined.
But Kotak Mahindra bucked the trend by raising savings account interest rate on daily balance above Rs 50 lakh by 50 bps to 4% per year effective June 13 while interest rates on fixed deposits were increased by 10-25 bps effective June 10. For instance, on FDs less than Rs 2 crore maturing in 365- 389 days, the rate has been raised to 5.5% from 5.4%, while for 390-day maturity the rate has been increased to 5.65% from 5.5%.