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India’s second-largest private bank, Housing Development and Finance Corporation (HDFC) hikes lending rate by 25 basis points in the retail prime lending rate (RPLR) on housing loans.
The benchmark lending rate for home loans has been raised by 25 basis points, as per a regulatory filing in the Bombay Stock Exchange. The new rate will come into effect from August 9, HDFC said.
"HDFC increases its retail prime lending rate (RPLR) on Housing loans, on which its adjustable rate home loans (ARHL) are benchmarked, by 25 basis points, with effect from August 9, 2022," it informed the stock exchanges.
The announcement comes close on the heels of the Reserve Bank of India hiking the repo by half a percentage last Friday to tame the rising inflation.
Other banks have also started hiking their lending rates including ICICI Bank, Canara Bank, Bank of Baroda and Punjab National Bank.
Bank of Baroda said that the best rate under the repo-linked lending rate would be 7.6 per cent from August 6. According to its website, home loan rates range from 7.95 percent to 9.3 percent.
The increase in RPLR will result in higher EMIs paid by home loan borrowers.
Financial institutions are expected to aggressively raise their lending rates, as the Reserve Bank of India (RBI) has been increasing the repo rate since May in a bid to tame inflation.
The repo rate hikes over the past three months have cumulatively increased it to 5.4 percent, which is the highest since August 2019.
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