The Marginal Cost of Funds Based Landing Rate (MCLR) would increase by 5 to 10 basis points (bps), according to the public sector lender Bank of India (BOI). The changes will take effect on September 1, 2022, and the overnight rate will increase by 5 bps in overnight MCLR and the one-year rate will increase by 10 bps.
Bank of India has said today in a regulatory filing that “Pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015, this is to inform that Bank’s Marginal Cost of Fund based Lending Rate (MCLR) has been changed with effect from 01.09.2022. The revision is in Overnight rate by +5 bps and in 1 year by +10 bps.”
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On overnight MCLR the bank has hiked the rate from 6.80% to 6.85% a hike of 5 bps, the 1-month MCLR has been kept unchanged at 7.30% by the bank, 3-month MCLR rate will continue to be 7.35%, 6-month MCLR has been hiked from 7.45% to 7.55% a hike of 10 bps, 1-year MCLR hiked by 10 bps from 7.60% to 7.70% and 3-year MCLR will continue to be 7.80%.
After the Reserve Bank of India raised its repo rate by 50 basis points at its bimonthly MPC meeting in August, leading public and private sector banks increased their MCLR. After the Reserve Bank of India raised its repo rate by 50 basis points at its bimonthly MPC meeting in August, leading public and private sector banks increased their MCLR after the increase in repo rates. For instance, Axis Bank recently increased its MCLR with effect from August 18. The marginal cost of lending rate, or MCLR has increased by 5 basis points, and Axis Bank’s 1-year MCLR is now 8.05%. Bank of Maharashtra on August 18 announced MCLR rate hike up to 25 bps and now the 1-year MCLR stands at 7.60%. Most of the loan types are based on the MCLR rate for one year. For borrowers who hold loans on MCLR, EMIs would increase due to the increase in the lending rate of the above the said banks including BOI.
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