New Delhi: HDFC on Saturday (May 7) announced that India’s leading housing finance company will raise its retail prime rate on home loans by 30 basis points from May 9, according to an exchange filing released on Saturday.
The latest hike in the retail prime rate on home loans will lead to an increase in EMIs paid by borrowers. HDFC’s decision to raise rates came after the Reserve Bank of India (RBI) earlier this week raised repo rates.
The RBI raised the repo rate by 40 basis points to 4.40%, in its first ever rate change in two years and its first rate hike in nearly four years.
Ahead of HDFC, several other public and private lenders raised lending and deposit rates after RBI’s surprise move on Wednesday. For example, ICICI Bank and Bank of Baroda (BoB) increased the external benchmark lending rate by 40 basis points.
“ICICI Bank External Benchmark Lending Rate” (I-EBLR) refers to the RBI policy repo rate with a markup over the repo rate. I-EBLR is 8.10% papm as of May 4, 2022,” the private lender’s site says. Also Read: LIC IPO: Here’s What the Latest GMP and Subscription Status Suggests on Day 4 of the Auction
The EBLR is the debit rate decided by the banks after taking into account external references. These factors include the repo rate, reverse repo rate and other factors. Simply put, the EBLR is the minimum interest rate at which borrowers can withdraw money from banks. Also Read: NPS Investors Can Now Set Up SIPs at Post Offices, Here’s How to Do It Online in Simple Steps