Loan Rate Hike Alert: In response to rising inflation, two significant banks, ICICI Bank and Punjab National Bank, have increased their Marginal Cost of Lending Rate (MCLR) by 5 basis points. The new tariffs became effective on September 1, 2023.
This change will have a direct impact on customers who intend to obtain auto loans, education loans, personal loans, or mortgages in the near future or in the future. It is crucial to recognise that MCLR directly affects loan interest rates.
Loan Rate Hike Alert: Banks Raise Interest Rates, Borrowers on Edge
New ICICI Bank rates:
ICICI Bank, the largest private sector bank in India, increased its MCLR by 5 basis points, affecting millions of clients. This modification increased the bank’s overnight MCLR from 8.40 percent to 8.45 percent. The one-month MCLR increased to 8.50 percent, the three-month MCLR increased to 8.85 percent, and the one-year MCLR increased to 8.95 percent.
New Punjab National bank rates:
The second-largest public sector bank, Punjab National Bank, also increased its Marginal Cost of Lending Rate by 5 basis points. The bank’s overnight MCLR consequently increased from 8.10 percent to 8.15 percent. In addition, the one-month MCLR rose from 8.20 percent to 8.25 percent, while the three-month MCLR rose from 8.30 percent to 8.35 percent.
The Marginal Cost of Funds Based Lending Rate (MCLR) is a fixed lending rate used by banks to determine the interest rates for auto loans, mortgage loans, education loans, and other types of loans. It establishes the lowest rate at which banks may lend to customers. Changes to the bank’s MCLR rates have a direct impact on customers’ interest rates and Equated Monthly Installments (EMIs). Higher MCLR rates impose greater EMI costs on customers.