Repo Rate: ICICI Bank’s loan became expensive as soon as RBI increased the rates, know what has become the interest rate now

New Delhi
Repo Rate Changed: The Reserve Bank of India has increased the policy rates by 40 basis points, giving a surprise on Wednesday. RBI’s repo rate has gone up to 4.4% since May 4. It was feared that after increasing the repo rate by the RBI, banks can also increase the interest on the loan.

After the announcement of an increase in the repo rate of India’s central bank RBI, the largest private sector bank ICICI Bank has announced an increase in the external benchmark lending rate. ICICI Bank has increased the external benchmark lending rate by 40 basis points to 8.10%. ICICI bank has given information about this on its website.

ICICI Bank said on its website, “With the change in the RBI’s repo rate, the EBLR has now become 8.10% per annum. After this increase in the EBL rate of ICICI Bank, its loans will become expensive. This also means It is said that ICICI Bank will no longer give loans to any person at an interest rate of less than 8.10 percent.

What is the External Benchmark Lending Rate?
External Benchmark Lending Rate means the lending rate set by the banks on the external benchmark. Things like External Benchmark Repo Rate are called. This is the lowest rate of interest on any loan. The Reserve Bank of India launched the Base Lending Rate or BLR system in the year 2010. After that the Bank Marginal Cost of Funds based lending rate was introduced in 2016. In the year 2019, the interest rates on MCLR were set. In October 2019, the Reserve Bank of India introduced the External Benchmark Lending Rate. Banks charge a credit risk premium over the external benchmark lending rate and repo rate for lending.

What is SBI’s EBLR?
Banks generally levy a risk premium on the external benchmark linked lending rate while granting housing and auto loans. At present, the country’s largest bank State Bank of India has an external benchmark lending rate of 6.65%. Along with this, the repo rate linked lending rate of SBI is 6.25%.

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