After increasing the repo rate, two more banks increased the loan rates

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After the decision of the Reserve Bank (RBI) to increase the policy rate, many banks have increased the external standard rate i.e. Repo Based Interest Rate (EBLR).

New Delhi :

Two more banks of the country have announced an increase in loan rates. State-owned bank, Bank of Maharashtra has increased the marginal cost of funding based lending rate (MCLR) by 0.15 across all tenors. Similarly, Karur Vysya Bank has also said that it has revised the external benchmark rate from 7.15% to 7.45%. Bank of Maharashtra has said that it has reviewed the marginal cost of funds based lending rate with effect from 7th March 2022.

Significantly, after the decision of the Reserve Bank (RBI) to increase the policy rate, many banks have increased the external standard rate i.e. Repo Based Interest Rate (EBLR). ICICI Bank has increased it to 8.10 percent and Bank of Baroda has increased it to 6.90 percent. Apart from this, two public sector banks, Bank of India and Central Bank of India, have also announced an increase in their interest rates after the hike in the repo rate. Banks have taken this decision after RBI on Wednesday announced to increase the policy rate (repo) by 0.40 percent to 4.40 percent to control inflation. The increase in EBLR rate will make personal loans, vehicle and home loans costlier for customers.

Public sector Bank of Baroda has also revised the external standard rate based interest rate. It has been said on its behalf, ‘The BRLLR (Baroda Repo Linked Rate) applicable for retail loans has been increased to 6.90 percent with effect from May 5, 2022. This includes RBI’s 4.40 percent repo rate and 2.50 percent ‘markup’. Bank of India has also increased its RBLR to 7.25 percent with effect from May 5, 2022, along with increase in the repo rate. The Central Bank has also increased its RBLR by 0.40 percent and it has been increased to 7.25 percent. This will be applicable from May 6, 2022. EBLR is the sum of external benchmark rate and credit risk premium.

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