After the State Bank of India (SBI) hiked the marginal cost of funds-based lending rate (MCLR), Axis Bank and Kotak Mahindra Bank have also increased MCLR on loans. Both of them raised the MCLR rates across tenures by 5 basis points.

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The new rates came into effect from April 16, 2022. The SBI had increased the MCLR rates by 10 basis points with effect from April 15. The rise in MCLR may result in an increase in the EMIs of homes loans, car loans, and other loans for both existing and future borrowers.

Marginal cost of funds-based lending rate is the minimum rate at which banks are allowed to lend. The actual rate for a borrower is usually more than this as banks/FIs factor in the marginal cost of funds, operating costs, negative carry-on account of Cash Reserve Ratio (CRR) and tenor premium.

Also Read: Loan EMIs set to go up as SBI, Axis Bank hike MCLR across tenures

Here are the tenure-wise revised MCLR of SBI

Tenure New Rate

Overnight 6.75 per cent

One Month 6.75 per cent

Three Month 6.75 per cent

Six Month 7.05 per cent

One Year 7.10 per cent

Two Years 7.30 per cent

Three Years 7.40 per cent

Here are the tenure-wise revised MCLR of Axis Bank

Tenure New Rate

Overnight 7.15 percent

1 month 7.15 percent

One month 7.25 percent

Six months 7.30 percent

One year 7.35 percent

Two years 7.45 percent

Three years 7.50 percent

Here are the tenure-wise revised MCLR of Kotak Mahindra

Tenure New Rate

Overnight 6.65 percent

One Month 6.90 percent

Three Month 6.95 percent

Six Month 7.25 percent

One Year 7.40 percent

Two years 7.70 percent

Three years 7.90 percent

However, these are not the only banks to hike MCLR recently. Public sector lender Bank of Baroda also announced an increase in its marginal cost of lending rate by 5 bps across all tenure from April 12. Other banks such as the HDFC bank, Punjab National Bank (PNB) and ICICI bank also revised MCLR. The one-year MCLR at HDFC, Punjab National Bank (PNB) and ICICI Bank now stands at 7.25 percent.

A rise in the MCLR typically will lead to an increase in interest due by the borrowers. The increase in the MCLR will also affect existing borrowers' EMIs when their loan reset dates arrive. Both consumers and corporates will pay a higher interest rate on loans. All loans, including home loans, taken after April 1, 2016, must be linked to the MCLR, according to RBI's requirement as per an ET report.

(Edited by : Sudarsanan Mani)

First Published:Apr 19, 2022 5:10 PM IST