ICICI Bank hikes prime lending rates by 15 bps: How will your EMI be affected? | Techno Glob


Private sector lender ICICI Bank has raised its External Benchmark Lending Rate (I-EBLR) by 15 bps. According to the bank’s official website; Higher rates are due on September 30; It will take effect in 2022. In addition, The bank hiked its Marginal Cost of Funds Based Lending Rate (MCLR) by 20 bps on Saturday. This move by ICICI Bank comes after the Reserve Bank of India (RBI) cut the key policy rate or short-term lending rate to banks by 50 basis points or 5.90%. Inordinate inflation.

ICICI Bank MCLR Rates

According to the bank’s official website, the new Marginal Cost of Funds Based Lending Rate (MCLR) rates are effective from October 1, 2022. ICICI Bank has hiked its MCLR by 20 bps across all borrowers and now stands at overnight to one month MCLR. 7.85%, three-month MCLR is 7.90%, 6-month MCLR is 8.05% and 1-year MCLR is 8.10%.

ICICI Bank MCLR Rates

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ICICI Bank MCLR Rates (icicibank.com)

ICICI Bank on its website said, “Eligible borrowers can avail home loans at attractive interest rates for both floating and fixed rate loans; ICICI Bank mentions low Equated Monthly Installments (EMIs) and no prepayment charges for floating loan rates. It offers easy repayment options with extended loans of up to 30 years.

External benchmark lending rate of ICICI Bank

“ICICI Bank External Benchmark Lending Rate” (I-EBLR) refers to the RBI Policy Repo Rate which is benchmarked above the Repo Rate and its website states that the I-EBLR is 9.25% papm. “

Home loan customers will see their EMIs increase due to the increase in interest rates. However, the criteria attached to your loan application will prevail. ICICI Bank said, “The interest rate is linked to a benchmark. As per RBI guidelines, home loan rates from banks are linked to external benchmarks. ICICI Bank’s interest rate is linked to the Repo Rate announced by the RBI from time to time. Hence, the interest rate of your home loan changes according to the Repo Rate. As a result, the EMI or the tenure of your loan will increase or decrease depending on the change in interest rates.”

For a home loan of Rs. 75 lakhs in ICICI Bank; Interest rates for payday loans range from 8.1% to 8.85%. The interest rate for the loan is Rs. 75 lakh is 8.1-8.95%. The interest rate for home loans for self-employed borrowers is Rs. 75 lakh between 8.20% and 9.00% for loans above Rs. 75 lakh is between 8.20% and 9.10%.

“Master Direction – RBI (Interest Rate on Advances) Directions,” from ICICI Bank. As of 2016, ICICI Bank said the interest rate below the external benchmark will be reset at least once a month. Therefore, The Repo Rate component of the interest rate will be reset on the first day of the third month from the month the Facility is first issued (regardless of the date of payment) and compounded quarterly; Repo Rate + “Spread” if any applicable statutory levy. The relevant Repo Rate shall be the rate in effect one business day before the reset date.

“As per Master Direction – RBI (Advance Rate) Guidelines, 2016, a floating rate loan means a loan where the interest rate is not fixed during the tenure of the loan. Hence, in case of floating rate loan, the benchmark of the loan is revised on a predetermined frequency. As per RBI guidelines, floating rate loans linked to external benchmarks should be revised at least once in three months,” said ICICI on its website under the FAQs section. The bank said.

How much will your EMI increase?

If the effective rate of return rises from the reset date; The effective ROI of the loan account will also rise and influence the EMI and tenure of the loan. Hence, the interest rate on home loan EMIs in ICICI Bank will rise as a result of the new hike of 15 bps. Consider a customer who gets a home loan for Rs. 50 lakhs for 20 years. for example, If the previous interest rate of the borrower’s home loan was 9.10%, after the 15 bps increase, the new rate will be 9.25% per annum. Rs. 50 lakh for a 20-year housing loan at an External Benchmark Lending Rate of 9.10 percent, the buyer will have to pay the EMI. 45,308; But after ICICI Bank’s EBLR rate hiked by 15 bps to 9.25% per annum. Your EMI will increase 45,793 increases your interest amount. 59,90,401 hence the total amount payable. 1,09,90,401.

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