Beginning Saturday, all ICICI Bank home loan customers will witness a 0.5 percentage point increase in their home loan rates and a similar hike on all other lending products of the bank as it decided to increase its base rate, benchmark prime lending rate (BPLR) and its floating reference rate (for consumer loans) by 0.5 percentage point.
The hike comes soon after the Reserve Bank of India’s announcement to raise the repo rate (at which RBI lends to commercial banks) by 0.5 percentage point on Tuesday. With this hike, the base rate for the leading private sector bank in India has risen to 9.25%.
The bank also said that beginning July 1, all new loans would be determined with reference to its base rate (I-Base).
“With effect from July 1, 2010, interest rates on new loans and advances, including consumer loans, are determined with reference to I-Base,” said ICICI bank in its statement.
BPLR and FRR are applicable for all loans disbursed up to June 30, 2010. While all floating rate home loan customers of the bank will witness see their loans turning expensive and see a hike in tenure and EMI of their loans, fixed rate customers will not be impacted by the increase.
Several banks including Punjab National Bank, Yes bank, IDBI and Oriental bank of Commerce have already raised their base rate and BPRL after the RBI’s announcement on Tuesday.