BANK OF BARODA on Friday increased the marginal cost of funds-based lending rates (MCLR) by 10 to 20 basis points across tenures, effective June 12. With this increase, the bank’s one-year MCLR now stands at 7.50%, according to information on the lender’s website.
So far, ICICI Bank increased the marginal cost of funds-based lending rates (MCLR) by 30 basis points while HDFC Bank increased its MCLR rates by 35 basis points across tenures.
Axis Bank’s one-year MCLR is at 7.75%, IndusInd Bank’s one-year MCLR is at 8.75% while that of State Bank of India is at 7.2%.
With the Reserve Bank of India (RBI) signaling an uptrend in the rate cycle and also a tightening of liquidity, banks have started increasing their loan rates. While some lending rates are linked to external benchmarks like the repo rate, others depend on the cost of funds.
Although deposits are growing at a healthy pace, following the withdrawal of liquidity from the system by the central bank, lenders may need to attract more deposits by increasing interest rates on them. Deposits grew by 9% year-on-year to `165.7 trillion during the fortnight ended May 20.