Private sector lender ICICI Bank revised its external benchmark lending rate (EBLR) to 8.1%, and state-owned Bank of Baroda raised the rate to 6.9% with immediate effect after the RBI raised the key repo rate.
Likewise, two other public sector banks - Bank of India and Central Bank of India - have also raised their repo-linked lending rates.
In an out-of-turn Monetary Committee Meeting (MPC), the Reserve Bank on Wednesday announced to hike the benchmark repo rate -- the short term lending rate it charges to banks -- by 0.40 percentage points to 4.4% with immediate effect, aimed at taming rising inflation caused by the global geopolitical situation.
The increase in the repo rate by RBI will push up the borrowing costs for most personal loans, auto and home loans for customers as the loans post-October 2019 had been linked to the repo rate.
"ICICI Bank External Benchmark Lending Rate (I-EBLR) is referenced to RBI policy repo rate with a mark-up over repo rate. I-EBLR is 8.1% p.a.p.m. effective May 4, 2022," the bank said.
The EBLR moves up or down in accordance with the movement in the repo rate.
State-owned Bank of Baroda also revised the external benchmark linked lending rate, with effect from May 5, 2022.
"For retail loans applicable BRLLR is 6.9% with effect from May 5, 2022 (current RBI repo rate: 4.4% plus mark-up of 2.5%)," Bank of Baroda said.
BoB had introduced Baroda Repo Linked Lending Rate (BRLLR) in respect of all retail lending products from October 2019.
Bank of India said the RBLR (Repo Based Lending Rate), with effect from May 5, 2022, is 7.25% as per the revised repo rate (4.4%).
State-owned Central Bank of India has also revised the RBLR by 0.4 percentage points, with effect from May 6.
The revised RBLR of Central Bank of India will be 7.25% plus the credit risk premium (CRP), from the existing rate of 6.85% plus CRP, the lender said.
The country's largest lender State Bank of India (SBI) has been charging the EBLR at 6.65% plus the credit risk premium, with effect from April 1, 2022.
EBLR is a sum of external benchmark rate (EBR) and credit risk premium (CRP). Last month, SBI raised the marginal cost-based lending rate (MCLR) by 10 basis points across all tenures.
With the revision, SBI's benchmark one-year MCLR -- against which most of the consumer loans are priced -- increased to 7.1% per annum.
In September 2019, the Reserve Bank had advised all banks to mandatorily link the interest rate to an external benchmark (which is the repo rate) for all new floating rate personal or retail loans as well as for floating-rate loans to MSMEs, with effect from October 1, 2019.
