Bank of Baroda, SBI revise MCLR rates

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Bank of Baroda (BoB) and State Bank of India (SBI) announced the hikes in the marginal cost of funds based lending rates (MCLR) for different tenures. Bank of Baroda increased the MCLR by 5 basis points and SBI by 20 basis points.

Bank-loan
The MCLR rates that were once revised gradually are being revised more often currently.

Each of the MCLR rates for the different tenures – one year to overnight have been increased by 0.05 per cent by BoB. The highest MCLR is for the one year tenure. The rate was previously 8.50 per cent and is now 8.55 per cent. The revised MCLR rates will come into effect from 7 September 2018.

MCLR tenure Current MCLR (%) Revised MCLR (%)
One year 8.50 8.55
Six months 8.35 8.40
Three months 8.15 8.20
One month 8.05 8.10
Overnight 8.00 8.05

 

The announcement for the increase in MCLR rates by BoB came in shortly after SBI raised the MCLR rate. The rates have been increased for all 7 tenures and have come into effect on 1 September 2018. The highest MCLR under SBI is 8.65 per cent for the three year tenure.

MCLR tenure Current MCLR (%) Revised MCLR (%)
Three years 8.45 8.65
Two years 8.35 8.55
One year 8.25 8.45
Six months 8.10 8.30
Three months 7.95 8.15
One month 7.90 8.10
Overnight 7.90 8.10

 

Financial experts are of the opinion that the increase in MCLR rates is a result of bad loans and the increase in the cost of funds. Another reason could be the fact that banks expect the repo rate to increase again and are hence rising lending rates in advance.

Source: Financial Express

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