With reference to Debashis Basu’s article, “Home loans loot: Whose side is RBI on” (August 21), I would like to add that it is not just that banks are not reducing their marginal cost of funds-based lending rate (MCLR) or passing on the benefit for loans. I experienced a strange case of one of the foreign banks (HSBC) increasing the MCLR immediately after the first three months, and that too by 25 basis points.
This is a quarterly reset based on MCLR, but in the last quarter, I cannot understand if the cost of funds for the bank or in the general economy has gone up. To my mind it is stable or a declining bias. Even then, immediately after the first three months (the loan was sanctioned in May), the bank is increasing the MCLR. I think they are probably changing the spread for home loans with MCLR for new customers, otherwise, they would lose the market share.
To my questions, I haven’t got any answers. I don’t know if there is an option to complain to the Reserve Bank of India (RBI) about these practices. Even if I complain, will the RBI be bothered about the fact that banks are not just refusing to reduce interest rates, but are also conveniently increasing the rates too?
Somy Thomas via email
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