ICICI Bank Hikes Interest Rates on Deposits and Lending

ICICI Bank, India's second-largest lender, has increased interest rates on deposits and lending, including home loans, by 25-75 basis points in response to the Reserve Bank of India's (RBI) Cash Reserve Ratio hike. The rate adjustment aims to maintain the bank's lending profitability and align with the RBI's monetary policy decisions. The move affects various deposit tenors and consumer loans, with specific impact dates ranging from December 18 to January 1. Existing fixed-rate customers are exempt from the increase.

Key Takeaways:

• ICICI Bank increased interest rates on deposits of value less than Rs one crore by 25-75 basis points across various tenors.
• The bank raised its prime lending rate, also known as the benchmark advance rate (BAR), and floating reference rate (FRR) by 50 basis points.
• The benchmark advance rate will now be 13.75% per annum payable monthly, up from 13.25% per annum.
• The floating reference rate (FRR) has been increased to 10.75% from 10.25%.
• Existing fixed-rate customers whose loans are fully disbursed will not be impacted by the increase in FRR, while existing floating-rate customers will experience the rate hike from January 1.
• The bank adjusted its interest rates in response to the RBI's decision to increase the Cash Reserve Ratio to 5.5%.

Statistics:

• 25-75 basis points: the interest rate hike on deposits of value less than Rs one crore across various tenors.
• 50 basis points: the increase in ICICI Bank's prime lending rate, benchmark advance rate (BAR), and floating reference rate (FRR).
• 13.75%: the new benchmark advance rate per annum payable monthly.
• 10.75%: the new floating reference rate (FRR).
• 13.25%: the previous benchmark advance rate per annum payable monthly.
• 10.25%: the previous floating reference rate (FRR).
• 5.5%: the new Cash Reserve Ratio as announced by the RBI.

Sources:

• PTI (newswire service)