Yes Bank, a private sector lender, has increased its MCLR (Marginal Cost of Funds Based Lending Rate), the lowest interest rate below which financial institutions are unable to provide loans to their consumers.
Following this announcement on June 1, 2022, Yes Bank increased its Marginal Cost of Funds Based Lending Rate (MCLR) across tenures by 15-25 basis points, resulting in higher loan EMIs for borrowers who have borrowed or are planning to borrow MCLR-linked loans.
As a result of the revision, Yes Bank’s overnight MCLR has been hiked to 7.10%. The one-month MCLR was hiked to 7.55 percent, the three-month MCLR to 7.70 percent, the six-month MCLR to 8.50 percent, and the one-year MCLR to 8.75 percent by the bank. As of September 1, 2021, Yes Bank’s Base Rate is 8.50%, while its BPLR is 19.75%.
As a result of the increase in the RBI repo rate to 4.40 percent, all banks’ MCLR rates have been adjusted. On June 1, 2022, the state-owned Punjab National Bank (PNB) increased its marginal cost-of-funds-based lending rate by 15 basis points.
The one-year MCLR rate at PNB has increased to 7.40% from 7.25 percent prior to the adjustment. The State Bank of India, Bank of Baroda, ICICI Bank, and HDFC HFC are among the financial institutions that have recently upped their marginal cost of funds-based lending rate (MCLR) across tenures.
According to RBI standards, all new variable rate personal or retail loans, as well as floating-rate loans to small businesses, must be based on an external benchmark.
HDFC raised its Retail Prime Lending Rate (RPLR) on Housing loans, which its Adjustable Rate Home Loans (ARHL) are benchmarked to, by 5 basis points beginning June 1, 2022. ICICI Bank, on the other hand, has raised its marginal cost of lending rate (MCLR) by 30 basis points across all tenures and overnight as of June 1, 2022, bringing the one-month MCLR to 7.30 percent.
Borrowers’ interest payments climb in tandem with the MCLR. Existing borrowers’ EMIs will be affected by the rise in the MCLR when their loan reset dates arrive.
Many banks have begun to raise the MCLR on loans since last month. The State Bank of India, Bank of Baroda, Kotak Mahindra Bank, Axis Bank, and others are among them.
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