HDFC hikes home loan interest rates, ICICI Bank, PNB increase MCLR

Important banks and housing finance companies have increased loan interest rates. HDFC has announced that it has raised its benchmark lending rate by 5 basis points, a move that will increase EMI for new and existing borrowers. One basis point is one-hundredth of one percentage point

“HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 5 basis points, with effect from June 1, 2022,” the company said in a statement.

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This is the third time HDFC has hiked its RPLR in the last one month. In May it hiked rates twice for a total of 35 bps.

ICICI Bank and Punjab National Bank (PNB) have announced a hike in their marginal cost based lending rates (MCLR).

Punjab National Bank
Punjab National Bank (PNB), a state-owned bank, hiked its marginal cost of funds-based lending rate by 15 basis points. The increased rates go into effect on June 1, according the PNB website.

ICICI Bank
ICICI Bank also revised the marginal cost of funds-based lending rate with effect from June 1, 2022, according to its official website.

Bank of India
Bank of India also hiked marginal cost of funds-based lending rate on some tenore with effect from June 1, 2022.

The Marginal Cost Of Funds Based Lending Rate (MCLR) was introduced as an alternative to the base rate system, and it serves as a benchmark for banks to not lend below. The MCLR varies depending on the tenor, which can range from overnight to three years.
Interest rates are projected to rise in the next months as geopolitical tensions, mostly owing to Russia's invasion of Ukraine, have fuelled global inflationary fears. This caused the Reserve Bank to boost its inflation target earlier this month