In line with the Reserve Bank of India's (RBI) directive, ICICI Bank and Bank of India have implemented a rate increase by revising their Marginal Cost of Funds based Lending Rate (MCLR) from today. The move is part of an effort by the banks to adopt more prudent lending practices as guided by the RBI, which could potentially impact the availability of personal loans.
ICICI Bank has applied the MCLR hike across all tenures. The overnight and one-month rates now stand at 8.50%, the three-month rate at 8.55%, the six-month rate at 8.90%, and the one-year rate at 9%.
Bank of India has also selected tenures for its MCLR hike, with its overnight rate now at 7.95%, one-month rate at 8.20%, three-month rate at 8.35%, six-month rate at 8.55%, one-year rate at 8.75%, and the three-year rate at 8.95%.
The RBI's guidelines are designed to encourage banks and Non-Banking Financial Companies (NBFCs) to adopt more cautious lending practices in a bid to safeguard financial stability.
InvestingPro Insights
Looking at the recent data from InvestingPro, ICICI Bank (ICBK) has a P/E Ratio (Adjusted) of 11.05 as of Q3 2023, a PEG Ratio of 0.03, and a Price / Book of 1.27. Its Operating Income Margin stands at 42.42% with a Return on Assets of 1.27%. These figures indicate a solid performance. Two InvestingPro Tips that stand out are that ICBK has consistently increasing earnings per share and has raised its dividend for 3 consecutive years, suggesting a promising outlook for investors.
On the other hand, Bank of India (BOI) has a slightly higher Market Cap of 737.57M USD, with a P/E Ratio of 14.67 as of Q2 2023. Its Revenue stands at 564.56M USD with a Gross Profit Margin of 73.88%. Notably, the bank's Return on Assets is significantly higher at 6.14%. From the InvestingPro Tips, we learn that BOI's revenue growth has been accelerating and net income is expected to grow this year, painting a positive picture for the bank's future.
For those interested in more in-depth analysis, InvestingPro offers an additional 13 tips for ICBK and 10 tips for BOI, providing a comprehensive view of these companies' financial health and potential.
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