Now, home and car loan borrowers have reasons to worry as some public and private sector lenders such as State Bank of India (SBI), Punjab National Bank (PNB) and leading private bank ICICI Bank on Thursday announced the hike in lending rates.
With such move by the banks, it is expected that the EMIs for home loans will be expensive for their respective customers. Sources, however, said that other banks will follow suit in the near future.
The largest lender State Bank on Thursday raised its lending rates or marginal cost of funds based lending rate (MClR) by 0.20 percentage point or 20 basis points (bps) to 8.15 per cent from 7.95 per cent, with immediate effect, setting the tone for the industry to follow suit. “The new MClR will be effective from March 1, 2018,” SBI said.
Following suit, PNB and ICICI Bank also hiked the MClR rates for loan borrowers.
The revised one-year MClR comes as dampener for home loan borrowers as EMIs are likely to go up.
Taking a cue from SBI, country's second-largest private sector lender ICICI Bank also raised the one-year MClR from 8.2 per cent to 8.3 per cent.
The PNB, which is struggling following the Nirav Modi mega scam also increased one-year MClR to 8.3 per cent from 8.15 per cent.
As far as the SBI move is concerned, this is the first lending revision by the bank since April 2016 and comes a day after it massively raised the retail and bulk deposit rates.
Prior to this, the one year-MClR on which most of the lending is based now was at 7.95 per cent.
The six-month MClR has been raised by 10 basis points to 8 per cent, while the three-year loan pricing goes up by 25 basis points to 8.35 per cent.
For the third consecutive time since November, the bank on Wednesday had raised its retail and bulk term deposit rates for various maturities by up to 75 basis points.
For retail deposits, below Rs 1 crore, the rate was increased by up to 0.50 per cent, while for deposits maturing in one year to less than two years, it was hiked by 0.15 per cent to 6.40 per cent.