Expensive Interest Rates hit the common man! BoB, ICICI, IDBI Bank hike interest rates on repo linked loans

Inflation has put such obstacles in front of the global economy, which has barely come out of the trouble of the Corona epidemic, that the central banks of all the countries of the world have no other option but to increase interest rates. On Wednesday, while the central banks of India and America have increased the statutory rates affecting interest rates by 0.40 percent and 0.50 percent respectively, on Thursday, the Bank of England has increased by 0.25 percent.

According to all experts, the era of rising interest rates will remain longer this time due to the long-term impact of the Ukraine-Russia war on the global economy. Many experts believe that interest rates will continue to rise in the coming year, i.e. in the year 2023. In India, the RBI is expected to raise the repo rate from 0.75 percent to one percent within the next year.

ICICI Bank and Bank of Baroda, on the other hand, hiked the rates of repo rate linked loans following the RBI announcement. This rate has been raised to 8.10 percent by ICICI Bank and 6.90 percent by Bank of Baroda. Many banks had already begun to raise deposit rates in anticipation of the potential of lending interest rates rising. It is expected that other banks would make a decision to progressively raise interest rates.

Reviewing the decision of RBI, Yes Bank and SBI Bank have said in their Ecowrap report that there may be a further increase of 0.75 percent in the repo rate by September 2022. If Wednesday’s increase is included, then in this way a picture of a total increase of 1.15 percent is being created. Yes Bank has said that there is a possibility of increasing the repo rate by 0.50 percent in the next financial year also. This expectation has been made in view of the trend of inflation.

According to SBI’s Ecowrap report, the banks would decrease the repo rate by 0.75 percent during the monetary policy review in June and August. According to the research, other banks are not only making loans more expensive in response to inflation, but they are also attempting to extract more money from the system, demonstrating that controlling inflation is now a top priority for all governments. has emerged as a top priority. According to some reports, the increase in interest rates will have an impact on bank credit distribution.