Days after SBI, ICICI Bank and PNB, Andhra Bank on Friday increased the marginal cost of funds based lending rate (MCLR) by 0.05 per cent to 8.55 per cent for various tenors.
Days after SBI, ICICI Bank and PNB, Andhra Bank on Friday increased the marginal cost of funds based lending rate (MCLR) by 0.05 per cent to 8.55 per cent for various tenors. The move by the state-owned bank will make consumer loans such as auto, car and home loans costlier for buyers. Andhra Bank in a BSE filing said: “This is to inform that the bank has increased its MCLR with effect from June 15, 2018.” The bank added that MCLR for overnight, one month, three months, six months, and one year tenor is different.
For overnight, one month and three-month tenor, Andhra Bank has raised the MCLR by 0.05 per cent each to 8 per cent, 8.05 per cent and 8.25 per cent respectively. As for six month and one year tenor, the MCLR has been raised to 8.40 per cent and 8.55 per cent respectively.
Earlier this month, the Reserve Bank of India had increased the key lending rate by 0.25 per cent to 6.25 per cent. Following this move, many banks also raised their interest rated. Apart SBI, ICICI and PNB, Bank of India, Oriental Bank of Commerce, Syndicate Bank, Karur Vysya Bank and Indian Bank have also raised the lending rate.
However, big lenders such as State Bank of India (SBI), ICICI Bank and HDFC Bank had hiked MCLR before the Repo rate revision by RBI.
SBI increased its lending rate by 10 basis points across all tenors up to three years. The new rate for SBI’s overnight and one-month tenors’ is 7.9 per cent. As for the three-year tenor, the MCLR has been raised to 8.45 per cent from 8.35 per cent.
Punjab National Bank (PNB), raised the MLCR for three-year and five-year tenors to 8.55 per cent and 8.7 per cent respectively. As for ICICI Bank, it raised five-year tenor MCLR by 10 basis points to 8.70 per cent. It has also raised the MCLR by 10 bps in loans with tenor of one year and three years.
The second largest private lender, ICICI Bank raised MCLR for one-year tenor by 10 bps to 8.40 per cent.
What Is MCLR?
MCLR is the abbreviated form of Marginal Cost based Lending Rates. It refers to the minimum interest rate below which a bank can’t lend to anyone except in some cases allowed by the Reserve Bank of India (RBI). The MCLR is an internal benchmark or reference rate for the bank.