Banks hike home, car loan EMIs
The EMI you pay on your home or auto loan is set to rise again. The hike will vary depending on the interest rate you are being charged now and the tenure of your loan, as well as the bank from which you took it. HT reports. Pinching the pocketindia Updated: Aug 17, 2010 01:54 IST
The EMI (equated monthly installment) you pay on your home or auto loan is set to rise again.
ICICI Bank on Monday announced that its benchmark prime lending rate (BPLR) and floating reference rate (FRR) (that applies to consumer loans like home loans) would be raised by 50 basis points with effect from Wednesday.
State Bank of India (SBI) announced a similar 50 basis point rise in its BPLR, taking it to 12.25 per cent, effective Tuesday.
This means the EMI an ICICI or SBI customer is paying on his loan will also increase.
The hike will vary depending on the interest rate you are being charged now and the tenure of your loan, as well as the bank from which you took it.
Several other banks too have already increased their BPLR over the past 10 days, including Bank of Baroda, Punjab National Bank, Bank of India and IDBI Bank. But SBI and ICICI - along with HDFC and HDFC Bank - are the biggest of the lenders.
"Lending rates of the banks are linked to BPLR, which swings in proportion to changes in the latter," said R R Nair, CEO, LIC Housing Finance.
Bankers, however, offered some consolation.
"There will not be an unreasonable hike in the lending rates of the bank, but we should expect a measured increase in the lending rates," said the executive director of a public sector bank, who refused to be identified.
The hike in the BPLR was triggered by the Reserve Bank of India increasing its key policy rates on July 27.
The RBI was compelled to do so in an effort to control inflation, which had hit double figures.
The central bank is expected to increase its policy rates once again on September 16, by 50 basis points.