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Indian Bank to hike MCLR by 10 to 20 bps across loan tenures from August 3

The MCLR (Marginal Cost of Funds Based Lending Rate) is the lowest or minimum interest rate below which financial institutions are not permitted to grant loans. (Photo: iStock)Premium
The MCLR (Marginal Cost of Funds Based Lending Rate) is the lowest or minimum interest rate below which financial institutions are not permitted to grant loans. (Photo: iStock)

  • The public sector lender Indian Bank has joined the line with other major banks such as ICICI Bank, PNB, and BOI to hike MCLR. Indian Bank is all set to hike its MCLR by 10 to 20 bps across all tenors effective from 03.08.2022.

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The public sector lender Indian Bank has joined the line with other major banks such as ICICI Bank, PNB, and BOI to hike MCLR. Indian Bank is all set to hike its MCLR by 10 to 20 bps across all tenors effective from 03.08.2022. The MCLR (Marginal Cost of Funds Based Lending Rate) is the lowest or minimum interest rate below which financial institutions are not permitted to grant loans, and as a result of the increase in the MCLR, existing and new borrowers of Indian Bank will have higher EMIs, adding to the burden on their personal finances.

Indian Bank MCLR

The current overnight MCLR is 6.75 per cent, the one-month MCLR is 6.95 per cent, the three months MCLR is 7.15 per cent, the six months MCLR is 7.40 per cent, and the one-year MCLR is 7.55 per cent. According to PTI, the bank has hiked 1 year MCLR by 10 bps from 7.55% to 6.65%. The Treasury Bill Benchmark Linked Lending Rate (TBLR) of more than one year to less than or equal to three years tenor was also increased from 6.10 per cent to 6.15 per cent, the bank further added. The other tenor MCLRs, from overnight to 6-months, has been revised upwards to 6.85 - 7.50 per cent, Indian Bank informed PTI. The bank has said that as of August 3rd, the updated MCLR and TBLR will be in effect.

Meanwhile, ahead of the policy meeting of RBI going to be conducted this week, other leading banks such as ICICI Bank, PNB and Bank of India (BOI) have also hiked their MCLR. ICICI Bank has increased MCLR by 15 bps across all tenors, while the BOI has increased the MCLR by 10 bps across all tenors. Punjab National Bank (PNB) has also raised its MCLR by 10 bps, across all tenors. With effect from 1st August 2022, the new MCLR rates will be in force according to the banks. Borrowers who have taken out home, vehicle, and personal loans from any of the above banks, would have to pay higher equivalent monthly instalments (EMIs) in the upcoming months as a result of the rise in MCLR.

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