Tamil Nadu-based Karur Vysya Bank hiked the base rate (BR) and benchmark prime lending rate (BPLR) by 40 basis points each. The new interest rates will be applicable from June 13, 2022.
According to regulatory filings, the base rate will be 8.75 per cent from the current 8.35%. While the benchmark prime lending rate will increase to 13.75% from the current 13.35%.
Last week closed on Friday on the bank’s stock 48.20 each on the BSE, down 2.43%.
Notably, every customer will not have to bear the brunt of the latest Base Rate and BPLR hike in their term loan. Marginal cost of funds based lending rate (MCLR) has replaced the base rate and most of the loans are pre-linked. However, the floating rate on term loans has evolved with further lending which is now also being linked to an external benchmark which is the RBI’s policy repo rate.
As of December 2021, RBI data showed that only 3% of private banks’ floating rate on loans is linked to the base rate, while 6.6% is for public sector banks.
On the other hand, 39.9 per cent of loans in private banks are linked to MCLR and 57 per cent to external benchmark. Meanwhile, among the public sector lenders – 61.4% of the loan book is linked to the MCLR and 28.3% is linked to the external benchmark.
According to the website of Karur Vysya Bank, home loan interest rates range from 7.15% to 9.35%, while home loan top-up rates vary from 8.05% to 8.25%. Personal loan rates range from 8.70% to 11.70%, and education loan rates range from 10.60% to 11.60%.
Also, the rates of digital four wheeler loan vary from 7.80% to 8.10%, and the interest rate on two wheeler loan ranges from 14% to 16%. Jewel loan personal rate ranges from 9.5% to 10%.