The state-run IDBI Bank raised its marginal cost of funds based lending rate (MCLR). The increase has taken place by up to 10 basis points across various tenors. The new rates have been effective from May 12, the bank said in a statement. The one-year MCLR has been raised to 8.65 per cent. The two year MCLR, now, will be 8.7 per cent. Similarly, the three-year MCLR will rise to 8.8 percent. The relatively short-term MCLR based rates are somewhat on the lower side. For instance, the overnight MCLR rate now stands at 8 per cent. If you increase the tenure to one month, the MCLR will rise to 8.10 per cent. The three-month MCLR, however, is marginally higher at 8.35 per cent. Similarly, the six month MCLR based lending rate is 8.45 per cent.
The marginal cost of funds based lending rate (MCLR) refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI. It is an internal benchmark or reference rate for the bank.
Early in the month of March, State Bank of India (SBI) and Punjab National Bank (PNB), raised their lending rates, following which ICICI Bank also raised its marginal cost of funds based lending rates (MCLR) with effect from March 1, 2018. The marginal cost of funds based lending rate of ICICI Bank is now 7.95% for the overnight rate against the earlier 7.8%, a hike of 15 basis points.
The marginal cost of funds based lending rate (MCLR) refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI. It is an internal benchmark or reference rate for the bank.
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