Union Bank of India and Bank of Baroda raised their marginal costs of funds-based lending rates (MCLR) on loans. While Bank of Baroda has increased its MCLR by 10-15 basis points across all tenures, Union Bank of India has raised the rate by 30 bps across all tenures. The MCLR hike will raise EMIs for existing borrowers as well as new borrowers.
The move comes even as the RBI has been raising the key interest rates to control inflation. The RBI has raised 190 basis points since May this year. In May, the central bank conducted its off-cycle monetary policy review to hike the repo rate to control inflation. It had hiked 40 basis points in the review.
According to Bank of Baroda’s website, the lender’s benchmark one-year MCLR has now risen to 8.05 per cent, from 7.95 per cent earlier. The new rates are effective from November 12. Its overnight MCLR has been increased by 15 bps to 7.25 per cent. The one-month MCLR has increase to 7.70 per cent as against 7.60 per cent. The three-month and six-month MCLRs has risen by 10 bps per cent each to 7.75 per cent and 7.95 per cent, respectively.
In the case of Union Bank of India, the revised interest rates are effective from November 11, 2022, to December, 10, 2022, according to its website. The bank’s overnight rate MCLR has now increased to 7.45 per cent from 7.15 per cent. Its one-month, three-month, and six-month rates are now 7.60 per cent, 7.80 per cent and 8 per cent, respectively. The one-year MCLR, two-year MCLR, and three-year MCLR stand at 8.20 per cent, 8.40 per cent, and 8.55 per cent, respectively.
India’s retail inflation accelerated to a five-month high of 7.41 per cent in September. It was the ninth month that the Consumer Price Index (CPI)-based inflation has remained above the RBI’s upper tolerance limit of 6 per cent, and has risen despite the central bank’s efforts to curb it. The retail inflation had stood at 7.04 per cent in May, 7.01 per cent in June, 6.71 per cent in July, 7 per cent in August and now 7.41 per cent in September.
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