RBI repo rate hike: PNB, BoB, Indian Bank, UCO Bank raise lending rates; EMIs to rise

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Several major banks, including Punjab National Bank, Indian Bank, UCO Bank, Bank of Baroda, Bank of India, Indian Overseas Bank and Tamilnad Mercantile Bank, have raised their benchmark lending rates after the Reserve Bank of India increased the repo rate, making loans costlier for borrowers.

The RBI on Wednesday raised the repo rate by 25 basis points to 5.50 per cent. The six-member Monetary Policy Committee voted unanimously for the increase and also changed its policy stance from “neutral” to “calibrated tightening”. The shift signals that the central bank is unlikely to consider a rate cut in the near term and leaves the possibility of further tightening open.

PNB raises RLLR to 8.35 percent

Punjab National Bank (PNB) increased its Repo Linked Lending Rate (RLLR) by 25 basis points from 8.10 per cent to 8.35 per cent, effective October 8. The revised rate includes a 0.35 per cent bank strategic premium. The bank has kept its Marginal Cost of Funds-based Lending Rate (MCLR) and Base Rate unchanged.

Since the RLLR is linked to the RBI's repo rate, borrowers with loans linked to this benchmark could see their borrowing costs rise following the revision.

Indian Bank raises RBLR to 8.20 percent

Indian Bank has increased its Repo Linked Benchmark Lending Rate (RBLR) from 7.95 per cent to 8.20 per cent, a 25-basis-point increase. The revised rate is effective October 8 and follows the RBI's decision to increase the policy repo rate by 25 basis points.

Bank of Baroda increases repo-based lending rate

Bank of Baroda (BoB) has raised its Repo Based Lending Rate by 25 basis points from 7.90 per cent to 8.15 per cent. The revision also takes effect from October 8.

Bank of India raises RBLR to 8.35 percent

Bank of India (BoI) has also raised its Repo Linked Lending Rate by 25 basis points to 8.35 per cent from 8.10 per cent. The repo-rate component of its RBLR has increased to 5.50 per cent from 5.25 per cent, while the bank's markup remains unchanged at 2.85 per cent.

Indian Overseas Bank hikes RBLR

Indian Overseas Bank (IOB) has increased its Repo Based Lending Rate by 25 basis points to 8.35 per cent, effective October 8. The revision follows the RBI's repo rate increase.

Tamilnad Mercantile Bank raises RLLR

Tamilnad Mercantile Bank has increased its Repo Linked Lending Rate from 8.25 per cent to 8.50 per cent, also a 25-basis-point increase. The revised rate follows the RBI's repo rate hike.

UCO Bank raises select lending rates

UCO Bank has raised select lending rates by 25 basis points following the RBI’s repo rate hike, effective October 8. The bank increased its repo-linked UCO Float rate from 8.05 percent to 8.30 percent and UCO Prime from 5.25 percent to 5.50 percent. Its three-month TBLR has been raised from 5.25 percent to 5.30 percent, six-month TBLR from 5.55 percent to 5.70 percent, and 12-month TBLR from 5.70 percent to 5.95 percent. However, UCO Bank has kept its MCLR unchanged across tenors, with the one-year MCLR remaining at 8.80 percent.

HDFC Bank cuts MCLR across tenure

HDFC Bank has cuts MCLR across various tenures. Following the latest revision, HDFC Bank’s overnight MCLR stands at 7.80 percent, while the MCLR for one month is 7.75 percent. The three-month MCLR has been set at 7.95 percent.

For longer-duration benchmarks, the six-month MCLR is now 8.15 percent, while the one-year MCLR stands at 8.30 percent. The two-year MCLR is 8.40 percent and the three-year MCLR is 8.55 percent.

More banks are expected to revise their lending rates following the RBI’s decision.