Home BusinessBIG News For Home Buyers: Your Loan EMIs To Go Up As 3 Banks Hike Basic Lending Rates
New Delhi: The equated monthly instalments (EMIs) have already increased significantly since May and will continue to rise as three major banks have raised interest rates on home loans of all tenures. ICICI Bank, Punjab National, and Bank of India have revised their marginal cost-based lending rate (MCLR) on loans. The new interest rates came into effect on 1 August 2023.
Marginal Cost of Funds based Lending Rate (MCLR) is the minimum lending rate below which a financial institution will not provide any loan. The MCLR is revised every month based on the repo rate and other borrowing-related rates. It was created by the Reserve Bank of India (RBI) as an alternative to the base rate system. Lending cannot be done below this rate, and it varies according to the loan period, ranging from overnight to three years.
ICICI Bank has raised MCLR by 5 basis points for all tenures. Overnight, the one-month MCLR rate has increased from 8.35% to 8.40%. The three-month and six-month MCLR rates in ICICI Bank are now 8.45% and 8.80%, respectively. Additionally, the one-year MCLR rate has increased from 8.85% to 8.90%.
For Punjab National Bank, the overnight MCLR rate remains at 8.10%, while the one-month MCLR rate is 8.20%. The three-month and six-month MCLR rates in PNB are now 8.30% and 8.50%, respectively. The one-year MCLR rate is now 8.60%, and the three-year MCLR rate is 8.90%.
Bank of India has set the MCLR for the overnight tenure at 7.95% and the one-month MCLR rate at 8.15%. The three-month and six-month MCLR rates in Bank of India are now 8.30% and 8.50%, respectively. The one-year MCLR rate is now 8.70%, and the three-year MCLR rate is 8.90%.
The Reserve Bank of India’s (RBI) monetary policy committee (MPC) decided to maintain the repo rate at 6.5% in June. Since May 2022, the repo rate has been increased by a total of 250 basis points to control inflation.
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