The State Bank of India has raised its marginal cost of funds-based lending rate, or MCLR, by 0.1% on all types of loans, PTI reported on Tuesday. The new rates came into effect from April 15.
Following the State Bank of India’s move, Bank of Baroda, Axis Bank and Kotak Mahindra Bank also increased their benchmark lending rates. Typically, other commercial banks follow the State Bank of India when it comes to lending rates.
The move will result in an increase in easy monthly installments, or EMIs, of borrowers.
MCLR is the minimum lending rate below which a bank is not permitted to lend. It is calculated based on the duration of the time that a borrower has to repay the loan.
The State Bank of India, which is the country’s largest lender, accounts for nearly one-fifth of all the loans in the country.
The State Bank of India has revised its one-year MCLR by 10 basis points. The lending rate has gone up to 7.1% from 7%, PTI reported.
Overnight, one-month and three-month MCLRs rose by 10 basis points each to 6.75%, whereas a six-month MCLR increased to 7.05%. A two-year MCLR increased by 0.1% to 7.30%, while a three-year MCLR rose to 7.40%, according to PTI.
Bank of Baroda, Axis Bank and Kotak Mahindra Bank have hiked their one-year MCLR by 0.05% each. With this, Bank of Baroda new MCLR for one year tenure stands at 7.35% with effect from April 12.
Axis Bank and Kotak Mahindra Bank have revised their one-year MCLR to 7.40% with effect from April 18 and April 16.
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