Bank of Baroda (BoB) on Friday raised its marginal cost of funds-based lending rates (MCLRs) by 10 basis points (bps) across tenures, a day after the Reserve Bank of India (RBI) chose to stay put on the repo rate and lowered its inflation forecast for the year ahead. The one-year MCLR at the bank now stands at 8.4%, the highest among large banks and at par with the rate at Axis Bank. MCLRs for shorter tenures will range between 7.9% and 8.25%. The new rates will come into effect on Saturday. BoB and Bank of India are the only large lenders to have held on to MCLRs even as yields in the money markets hardened in the past few months. Some bankers and other industry players have said that the system had been waiting for the RBI’s April monetary policy to take a call on rates. Most bankers now expect rates to remain flat until the central bank’s next policy review as they expect a possible shortage of liquidity in the days ahead. They would also look to keep interest rates on deposits at attractive levels so as not to lose out on savings. PK Gupta, managing director, State Bank of India (SBI), told a business news channel on Thursday that even while the RBI was raising rates, banks had not really tinkered with their rates because there was enough liquidity available in the market. “I think liquidity did tighten up a little bit and so some banks started raising rates, forcing other banks to raise rates as well. Liquidity is going to remain comfortable and for the first six months I don’t see the rates moving either way,” Gupta said. Banks started raising lending rates in January, with Axis Bank leading the charge that month. In subsequent months, SBI, HDFC Bank, ICICI Bank and Punjab National Bank hiked rates, in what turned out to be the first of a series of rate increases since the MCLR framework was put in place.