Housing Development Finance Corporation Ltd (HDFC) on Thursday said it will raise Retail Prime Lending Rate on housing loans by 50 basis points from June 10, 2022.
“HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 50 basis points, with effect from June 10, 2022,” the mortgage lender said in a stock exchange filing.
Following the RBI monetary policy committee’s (MPC) decision to raise benchmark policy rate by 50 basis points, many lenders, including ICICI Bank and Bank Baroda have also raised their external benchmark linked loan rates by an equal amount.
ICICI Bank on Thursday raised its external benchmark lending rate by 50 basis points to 8.60 per cent while Bank of Baroda has increased its repo linked lending rate to 7.40 per cent. RBL Bank has also raised its repo-linked lending rate by 50 bps to 10 per cent, effective June 8, 2022. Another private sector lender, Federal Bank, has also factored in the increase in repo rate and increased the interest rates accordingly.
On Wednesday, the six-member MPC raised the repo rate for the second time in as many months by 50 basis points to 4.90 per cent. Since May the repo rate has been increased by 90 basis points by the rate setting body to tame headline inflation which has been consistently over the 6 per cent threshold.
In May, the rate setting body raised the repo rate by 40 basis points in an off-cycle meeting, thus ending the days of ultra-loose monetary policy and officially starting the tightening cycle.
Economists expect there could be a rate hike in the August monetary policy too and even in the October policy, thereby taking the repo rate to 5.5 per cent by October.
Indian Overseas Bank raised its repo linked lending rate by the same margin.
“We… inform that our bank has revised the RLLR (repo linked lending rate) to 7.75 per cent (i.e. 4.90 per cent + 2.85 per cent = 7.75 per cent) with effect from 10th June 2022,” IOB said in a filing.
Earlier on Wednesday, three state-owned lenders Punjab National Bank, Indian Bank and Bank of India had announced raising their respective repo based lending rates by 0.50 per cent each.