Due to the hike in the MCLR, existing and new borrowers of Bank of India will have higher EMIs from next month.
Mumbai: The Bank of India on Tuesday hiked its benchmark lending rate of overnight, 6-month and 1-year tenures by 5-10 basis points. The bank in a statement said that the revised marginal cost of fund-based lending rate (MCLR) will be effective from September 1. For the unversed, the MCLR is the lowest or minimum interest rate below which financial institutions are not allowed to provide loans. Due to the hike in the MCLR, existing and new borrowers of Bank of India will have higher EMIs from next month
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The overnight MCLR from the Bank of India now increased by 5 basis points (bps) to 6.85 per cent, six-month MCLR has risen by 10 bps to 7.45 per cent, and the benchmark 1-year MCLR has been revised upward by 10 bps to 7.60 per cent, according to the bank’s website
However, the Bank of India said the rest of the MCLR tenures remain untouched. According to the bank, the one-month MCLR continues to be the same at 7.3 per cent, three-month MCLR remains at 7.35 per cent and three-year MCLR at 7.80 per cent.
Various banks in the past months have been increasing their interest rates on deposits as well as loans. The hikes from the banks came after the monetary policy tightening by the Reserve Bank of India (RBI) to control inflation.
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Recently, the RBI’s Monetary Policy Committee increased the key repo rate by 50 basis points to 5.4 per cent in early August. The repo rate was the third straight hike after a 50 per cent raise in June and a 40 per cent hike in May.
Along with the banks, the non-banking institutions are also hiking the interest rates. Recently, LIC Housing Finance and Bajaj Housing Finance have recently announced a hike in lending rates for home loans by 0.5 per cent.
As per the updates, the Bajaj Housing Finance increased its rate by 0.50 percentage points, and the lowest priced product for the salaried and professional applicants will be 7.70 per cent now.
On the other hand, the LIC Housing Finance also increased its prime lending rate (LHPLR) by 0.50 percentage points and the new interest rates on home loans will now start from 8 per cent as against 7.50 per cent previously.
