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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.
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. CNBCTV has said today via its Twitter handle that “#IndianBank to hike #MCLR by 10-20 bps across loan tenures from August 3."
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.