The increase in PNB MCLR will mean that loan EMIs for the bank’s existing and new customers are going to increase soon.
PNB MCLR Rate Hike: Public sector lender Punjab National Bank has increased its marginal cost of lending rate, or MCLR across all tenors, according to its website. The MCLR, a key point in deciding loan interests, has been hiked by as much as 5 basis points, said Punjab National Bank. The new PNB MCLR rates have come into effect from September 1, Thursday.
The PNB MCLR rate hike comes almost a month after the Reserve Bank of India increased its repo rates again by 50 basis points, to further cool down inflation that has remained above the central bank’s upper tolerance limit of 6 per cent. Banks hike or lower their lending rates on the basis of the RBI’s repo rates.
The increase in PNB MCLR will mean that loan EMIs for the bank’s existing and new customers are going to increase soon. PNB’s overnight benchmark marginal cost of lending rate has increased from 7.00 per cent to 7.05 per cent, while its rates for one month, three months and six months have been increased by 5 bps each to 7.10 per cent, 7.20 per cent and 7.40 per cent respectively. On the other hand, MCLR for one year has increased by 5 bps from 7.65 per cent to 7.70 oer cent, while the same has surged from 7.85 per cent to 8.00 per cent for a thee-year tenure.
Over night: Old rate — 7.00 per cent; New rate — 7.05 per cent
One Month: Old rate — 7.05 per cent; New rate — 7.10 per cent
Three Month: Old rate — 7.15 per cent; New rate — 7.20 per cent
Six Month: Old rate — 7.35 per cent; New rate 7.40 per cent
One Year: Old rate — 7.65 per cent; New rate 7.70 per cent
Three Years: Old rate — 7.95 per cent; New rate 8.00 per cent
As a result of the Punjab National Bank MCLR rate hike, housing, vehicles and personal loans are going to get more expensive as the EMIs will increase. However, existing home loan borrowers must note that the EMI will be revised only when the reset date of their loans arrive. The lender will increase or revise the interest rate on the borrowers’ home loans on the basis of prevailing MCLR when the reset date arrives. This means that if a person’s home loan is based on MCLR, and the reset date is in December, then he or she will have to pay the hiked EMIs from December. Till then, the borrower will pay on basis of their existing rates.
To control inflation, the Reserve Bank of India (RBI) in early August raised the key repo rate by 50 basis points (bps). Since May this year, the RBI has increased its repo rates by as much as 140 basis points. Inflation has cooled off since then, but is still over the RBI’s upper tolerance limit.
