Bank Of Maharashtra, IDFC First Bank increases MCLR rate

State-owned Bank of Maharashtra (BoM) on Monday raised the marginal cost of funds-based lending rates (MCLR) by 20 basis points or 0.20 per cent across tenures. The revised rates will go into effect on October 10, 2022.

The benchmark one-year MCLR will be 7.80 per cent from Monday, as against 7.60 per cent.
Mumbai-based private banker, IDFC First Bank has also revised its marginal cost of funds-based lending rates (MCLR). IDFC FIRST Bank’s base rate is 9.50 per cent effective from October 8,2022.

The minimal lending rate or the internal benchmark below which a bank is prohibited from lending is known as the Marginal Cost of Funds based Lending Rate (MCLR).

The revision will make loans linked to MCLR benchmark costlier. The one-year rate is used to fix most consumer loans such as auto, personal and home loans.

The overnight to six months tenor MCLRs are raised by 0.20 per cent each in the range of 7.30 to 7.70 per cent for Bank of Maharashtra.

The overnight to six months tenor MCLRs are in the range of 8.05 to 8.75 per cent for IDFC first Bank.

The bank increased the MCLR across all tenors in response to the adjustment, and the hike in lending rates is aligned with the RBI’s 50 basis point increase in the repo rate to 5.9 per cent.
Many banks led by State Bank of India (SBI) have already adjusted their lending rates after the Reserve Bank raised the benchmark interest rate to tame inflation.