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Some of the major banks including the State Bank of India (SBI), Axis Bank, Kotak Bank, and Bank of Baroda have raised their MCLR by 5-10 basis points (bps). Banks have hiked lending rates for the first time in around three years. Other banks are also likely to increase their lending rates in the coming days.

If the MCLR is hiked, how will it impact borrowers?

Major lenders like SBI, Kotak Bank, Axis Bank, and Bank of Baroda have made 5-10 basis points hikes in their MCLR. It means that retail loans for homes, cars, or personal could go higher, and will also affect your Equated Monthly Installments (EMIs), said Amit Gupta, MD, SAG Infotech

He further added that this could also mean that the regime of lower lending rates, which borrowers are enjoying from 2019 onwards may soon come to an end and many other financial institutions may follow suit.

State Bank of India has increased its marginal cost of funding based lending rate (MCLR) by 0.10 per cent across tenors, as per data available at SBI website.

Bank of Baroda has increased its one-year MCLR by 0.05 per cent.

Private sector lenders Axis Bank and Kotak Mahindra Bank have also hiked one-year MCLR rates.

EMIs linked to the MCLR would see a slight increase, but loans taken against other benchmarks like EBLR and RLLR will continue to be static.

SBI's EBLR (external benchmark based lending rate) rate is 6.65 per cent, while the repo-linked lending rate (RLLR) is 6.25 per cent, effective April 1.

 

 

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