Union Bank of India has raised its marginal cost of funds-based lending rates (MCLR) by 10 basis points (bps) across all loan tenures, according to the state-owned lender's website.
In similar instances, several banks including ICICI Bank, Bank of Baroda, Punjab National Bank (PNB), Indian Bank, Indian Overseas Bank and the country's leading mortgage lender HDFC Ltd have increased lending rates for their customers.
The lending rate hikes by these banks follow the RBI's second bi-monthly monetary policy meeting review for FY23 on June 8.
The country's largest private sector lender, HDFC Bank, also announced a 0.35 percent hike in lending rate. It increased its interest rates on housing loans by 50 bps. Till now, it has raised rates by 85 bps since the RBI had increased the repo rate by 40 bps in an off-cycle meeting on May 4.
ICICI Bank, the second-largest private sector lender, raised its external benchmark lending rate by 50 bps to 8.60 per cent, while Bank of Baroda hiked its repo rate-linked lending rate to 7.40 per cent. Private sector lender RBL Bank also increased its repo-linked lending rate by 50 bps to 10 per cent. Likewise, Federal Bank raised its lending rates by 50 bps for loans linked to the repo rate. One basis point is one-hundredth of 1 percentage point.Notably, the rate hikes are being implemented at a time when credit growth is not too high and banks are eager to expedite on the move. Deposit rates have also witnessed hikes, which preceded the lending rate hikes and the change in the policy environment.