Soon after the Reserve Bank of India hiked the repo rate by 50 basis points in its August monetary policy meeting citing concerns about inflation, several banks have increased their loan interest rates, including SBI, ICICI Bank, Bank of Baroda, Canara Bank, and PNB. It is anticipated that other banks will follow suit with the RBI's plan to reduce inflation by raising the cost of consumer loans.

WHAT IS THE EXTERNAL BENCHMARK-BASED LENDING RATE?

The RBI established a system in September 2019 to link all new floating rate personal loans, retail loans, and loans to micro- and small businesses to external benchmarks. To ensure the efficient transmission of changes to the main policy rates, this was done. Internal benchmarks like the Base rate and MCLR have been found to not effectively transmit monetary policy decisions.

Your EMI outlay will increase along with the rise in I-EBLR. If the EMI for the current month has not yet been withdrawn from your home loan because it is connected to the I-EBLR, the bank will base its calculation of the new EMI payment on the outstanding principle.

STATE BANK OF INDIA

SBI has hiked the external benchmark-based lending rate with effect from 15th August 2022. The rates have been hiked to 8.05%+CRP+BSP from 7.55%+CRP+BSP. EBLR is a combination of a repo rate plus a spread plus a credit risk premium which is based on your credit score. The bank's repo linked lending rate (RLLR) is hiked to 7.65%+CRP from 7.15%+CRP.
 

ICICI BANK

As per the bank's website, "RBI Policy Repo Rate effective August 5, 2022 is 5.40%. 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 9.10% p.a.p.m. effective August 5, 2022."

BANK OF BARODA

The Baroda Repo Linked Lending Rate (BRLLR) has increased. According to the bank's website, the Baroda Repo Linked Lending Rate (BRLLR) has been increased with effect from August 6, 2022. For retail loans, the BRLLR is 7.95%. The BRLLR is made up of the current RBI repo rate i.e., 5.40% and a mark-up/base spread of 2.55%, according to the bank's website.

CANARA BANK

Canara Bank increased its repo rate-linked lending rate by 50 basis points from 7.80% to 8.30%. On August 7, 2022, the new loan rate will go into effect. The increase in the key policy rates by 50 basis points (100 basis points = 1%) by the Reserve Bank of India (RBI) before the revision by one day.
 

PUNJAB NATIONAL BANK

PNB hiked the repo, the external benchmark, linked lending rate to 7.90 percent. According to the BSE filing, "Consequent upon an increase in repo rate by RBI, the Repo Linked Lending Rate (RLLR) has been revised from 7.40 percent to 7.90 percent with effect from August 8, 2022."