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Loan EMIs to go up as public sector bank hikes MCLR rates

Mumbai: Leading nationalized bank in the country, Bank of Baroda (BoB), decided to hike its Marginal Cost of funds based on the Lending Rate (MCLR).  BoB, the third largest public sector bank in the country has announced a hike of 5 basis point (bps). The revised rates will come into effect from Sunday, February 12, 2023.

The decision was taken against the backdrop of the Reserve Bank of India’s decision to increase the repo rate by 25 basis points to 6.50%. From May 2022, the central bank has revised repo rates 5 consecutive times to reduce inflation.

Also Read: Industrial production growth in India falls in December 

Bank of Baroda increased the MCLR by 5 basis points to 7.90% from 7.85%. One month tenure MCLR is hiked by 5 bps to 8.20% from 8.15%. The three-month MCLR will now be at 8.30 The six-month MCLR has been changed from 8.35 to 8.40. One-year MCLR will now be at 8.55%.The bank announced that the new rate will be hiked to 8.55 %from 8.50 %for one-year maturities.

After this rate hike, the equated monthly instalments (EMIs) of all retail loans including car, personal and home will go up.

MCLR is the minimum rate of interest banks are allowed to give out loans to its customers. It is a benchmark interest rate and it dictates the lower limit of the interest rate for a loan.

 

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