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Business News/ Money / ICICI Bank, Punjab National Bank (PNB) revise lending rates; loan EMIs to be impacted
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Private sector lender ICICI Bank and public lender Punjab National Bank (PNB) have revised their marginal cost-based lending rates (MCLR). While ICICI Bank has reduced the rates on some tenures increasing the remaining ones, PNB has hiked MCLR for all tenures. 

ICICI MCLR rates with effect from 1 June

ICICI Bank has revised its marginal cost-based lending rates (MCLR). The new interest rates are effective from today, 1 June 2023, the lender noted on its website. ICICI Bank has reduced one-month MCLR from 8.50% to 8.35% and it cut three-month MCLR by 15 basis points (bps) from 8.55% to 8.40%. The bank has hiked MCLR on six-month and one-year tenures by 5 bps to 8.75% and 8.85% respectively.

Overnight 8.35%

One Month 8.35%

Three Months 8.40%

Six Months 8.75%

One Year 8.85%

PNB MCLR rates with effect from 1 June

Punjab National Bank (PNB) has also increased its marginal cost of lending rates (MCLR) by 10 bps on all tenures. The new interest rates are effective from June 1, 2023.

As per the PNB website, the bank’s overnight benchmark marginal cost of lending has been increased to 8.10 per cent from 8 per cent. The rates for one month, three months, and six months have been hiked to 8.20 per cent, 8.30 per cent, and 8.50 per cent, respectively. The one-year MCLR is increased to 8.60 per cent, while the three-year MCLR has been hiked to 8.90 per cent from 8.80 per cent.

Overnight  8.10%

One month  8.20%

Three months  8.30%

Six months 8.50%

One year  8.60%

Three years 8.90%

The benchmark one-year MCLR, is used to price most of consumer loans such as auto, personal, and home.

ICICI Bank, PNB revise lending rates: Who will be impacted?

Borrowers' EMI or Equated Monthly Installments outgo will get expensive for those who take loans against the MCLR.

Should borrowers prepay their home loans?

Pros of prepaying home loan

-You could prepay your home loan if you are close to retirement to eliminate liabilities and enjoy a peaceful retirement.

-As banks charge higher interest rates for home loans than what you may earn on most financial instruments it could make sense to prepay a home loan and save on interest rather than invest in fixed income instruments which offer lower returns.

Cons of prepaying home loan

-You qualify for a tax deduction up to 2 Lakh per annum on home loan interest repayments. It helps you reduce taxes by around 40,000 and 60,000 per annum if you are in the higher income tax brackets of 20% and 30%. You may lose this tax benefit if you prepay the home loan.

-Do not prepay home loans with the money you have invested for vital financial goals.

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Updated: 02 Jun 2023, 09:13 AM IST
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