According to the revised rates, which went into effect on August 1, ICICI Bank’s one-year MCLR increased by 15 basis points or 0.15 percent to 7.90 percent, while the overnight MCLR increased to 7.65 percent, according to information posted on the bank’s website.
ICICI Bank, the second-largest private sector lender, and state-owned Indian Bank raised lending rates across all tenors on Monday in anticipation of an RBI rate hike later this week.
The marginal cost of funds-based lending rate (MCLR) system has increased rates across all tenors, making EMIs more expensive for those who have loans benchmarked against the MCLR.
According to the revised rates, which went into effect on August 1, ICICI Bank’s one-year MCLR increased by 15 basis points or 0.15 percent to 7.90 percent, while the overnight MCLR increased to 7.65 percent, according to information posted on the bank’s website.
The one-year MCLR is significant in terms of retail loans because long-term loans such as home loans are linked to this rate.
The rate increase comes ahead of the Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI) later this week. The MPC is widely expected to raise interest rates in order to combat high inflation.
Later in the day, state-owned Indian Bank raised its one-year MCLR to 7.65 percent, a 0.10 percent increase over the previous rate.
The other tenor MCLRs, ranging from overnight to 6-months, have been revised upwards to 6.85 – 7.50 percent, according to Indian Bank.
It also reduced the TBLR (Treasury Bill Benchmark Linked Lending Rate) of more than one year to less than or equal to three years from 6.10 percent to 6.15 percent.