Increase in lending rates can create chaos in your festival plans
Posted on: 02/Oct/2018 12:39:00 PM
Top lenders of the nation have increased their lending rates ahead of RBI’s monetary policy reviewing on Friday. This can lead to disruptions in the festival budget of people in the months of November and December.
Lenders such as State Bank of India, ICICI Bank and Punjab National Bank have increased their interest rates owing to the increase in Repo rates of Reserve Bank of India (RBI). The current increase in the repo rate is the third time this year with the upward of 25 basis points. The increase in the rate will be effective after the announcement of RBI in policy review meeting. The sudden negative fluctuations affecting people in ways of increasing interest rates was attributed to crude oil price hike and Indian rupee depreciating in the scene of world economy.
SBI, PNB and ICICI are the lenders with largest customer base in the country. These banks have revised their Marginal cost of funds based lending rate (MCLR) starting from October 1, 2018. PNB increased the MCLR by 20 basis points and SBI increased the MCLR for all tenures by 0.05 percent from 8.45 percent to 8.50 percent. ICICI Bank increased the MCLR rates by 10 basis points in all of its loan models. After fixing the basis points as 25 with two hikes in a year now the new repo rate will force all the banks to increase the lending rates affecting the customers especially with the forthcoming festive months.
There is a strong expectation of inflation as a result of petrol and diesel prices going up constantly disrupting all the commercial and domestic operations of the nation. Increase in the repo rate will show the face of upward spiral as suggested by the experts for the coming months. This may further shoot up the lending rates for all loan tenures. People should plan ahead of their expenditures and saving methods to face the depreciating scenario of Indian bank systems.
