New Delhi: State-owned Punjab National Bank on Tuesday said it has hiked the benckmark lending rate by 5 basis points across tenors from 1 November that will make retail loans costlier for costumers.

The marginal cost of funds based lending rate (MCLR) has been revised with effect from 1 November 2018, the bank said in a regulatory filing.

The benchmark one-year MCLR rate — on which most of retail loans are based--stands increased to 8.50%. For other tenors, three-year loan will come at a rate of 8.7%, for six-month it will attract interest of 8.45% and for three months it would be at 8.25%.

One-month and overnight tenor loans will be priced at 8.15% each. The MCLR mechanism was introduced into banking system in April 2016 as an alternative to the base rate, below which banks cannot lend, for new borrowers.

MCLR is calculated on the marginal cost of borrowing and return on net worth for banks.

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