EMIs Set To Rise As HDFC Hikes Lending Rates To 5.9%; More Banks Likely To Follow Suit

This marks HDFC's seventh increase undertaken by the bank in the last five months. Since the RBI has raised the key interest rate by 50 basis points, other banks are also expected to follow the suit.

EMIs Set To Rise As HDFC Hikes Lending Rates To 5.9%; More Banks Likely To Follow Suit
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India's biggest housing finance company, HDFC Ltd raise the lending rates by 50 basis points hours on Friday. The news comes hours after the Central Bank of India, -- Reserve Banki Of India (RBI) increased the benchmark interest rate to put down inflation.

This move will cost on pockets of people as it will increase the EMIs for those who wish to purchase a house through housing loans by the firm.

"HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 50 basis points, with effect from October 1, 2022," HDFC in a statement said.

This marks HDFC's seventh increase undertaken by the bank in the last five months. Since the RBI has raised the key interest rate by 50 basis points, other banks are also expected to follow the suit.

On the other hand, this marks RBI's fourth straight increase since May. As per the information, the Monetary Policy Committee (MPC), which consists of RBI's three members and three external experts, raised the key lending rate or the repo rate to 5.90 per cent -- the highest since April 2019.

Since the first unscheduled mid-meeting hike in May, the cumulative increase in an interest rate now stands at 190 basis points and mirrors similar aggressive monetary tightening in major economies around the globe to contain runaway inflation by dampening demand.

(With agency inputs)

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