Indian Bank Loan: Bad news for loan customers! Indian Bank hiked interest rates –

Indian Bank Loan: State-owned Indian Bank hiked interest rates on bank loans. At the same time, the rate of ‘Marginal Cost of Fund-Based Lending Rates’ (MCLR) has also been increased. A total increase of 25 basis points. These new rates are effective from January 3. This information is given by Indian Bank on its website.

The ‘Asset Liability Management Committee’ (ALCO) held a meeting on the rates of Marginal Cost of funds-based Lending Rate (MCLR), Treasury Bills Linked Lending Rates (TBLR), Base Rate and Benchmark Prime Lending Rate (BPLR). The entire matter was reviewed in that meeting. It is after the review that the decision to increase MCLR, TBLR, Base Rate and BPLR rates is taken. The new rate is applicable for any tenor, the bank said.

This new rate, effective for 1 year, comes into play in determining the rates of all types of consumer loans. Banks will lend at this new rate for consumer loans i.e. auto, personal and home loans.
As a result of the bank’s decision, the overnight MCLR rate increased by 25 basis points to 7.75%. Whereas 20 basis points have been increased in case of loans with tenure of 1-6 months.

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The loan rate for one year tenure has gone up from 8.20% to 8.30%. At the same time, the treasury bills benchmark lending rate (TBLR) has also been increased by the bank. It has been increased from 6.40% to 6.85%. This is done for all tenures.
Bank sources said the base rate was hiked by 25 basis points to 9.1%. There Benchmark Prime Lending Rate is 13.35%.
As a result, you will naturally have to pay more towards the EMI of the loan. The pressure will be on the pocket. The already high inflation, coupled with the forecast of a recession in the new year, has raised concerns. Paying more for EMIs there will undoubtedly create financial stress.

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However, according to a section of analysts, there is no other way for the bank. Because, the Reserve Bank of India has raised the repo rate by a total of 2.25 basis points in 2022. As a result banks have to pay higher interest to borrow money from RBI. The cost of that extra interest is what the bank is charging the customers with the increased interest rate.

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