The new Union Bank MCLR rates have come into effect from September 11. The UBI MCLR rate hike will mean that loan interests for new and existing borrowers are set to increase.
Union Bank of India MCLR Rate Hike: India’s leading public sector lender Union Bank of India has hiked its marginal cost of lending rate (MCLR), the lender has said in a notification earlier. The marginal cost of lending rate, or MCLR, which is a key point in deciding various loan rates, has been hiked by 5 to 35 basis points, the Union Bank of India has said in its notification. The new rates have already become effective, as per the notification.
The new UBI MCLR rates have become effective from September 11, Sunday. Union Bank of India MCLR rates for overnight and one month tenures have been hiked to 7.00 per cent and 7.15 per cent, thus increasing by 5 bps across all the tenures. For the three month tenure, the MCLR rates have been kept unchanged at 7.25 per cent. For tenures of six months and one year, the UBI Bank rates are 7.55 per cent and 7.75 per cent, respectively, also hiked by 5 bps. For tenures of two years and three years, the UBI MCLR rates are 7.95 per cent and 8.10 per cent, hiked by 20 bps and 35 bps respectively. It must be noted in this case that 100 bps equals to 1 per cent. Therefore ICICI Bank MCLR rates have been hiked by 0.20 per cent.
The new Union Bank MCLR rates have come into effect from September 11. The UBI MCLR rate hike will mean that loan interests for new and existing borrowers are set to increase, including equated monthly installments (EMIs) for home loan, vehicle loan and any other loan related to marginal cost. This can be called a result of the RBI hiking its repo rates, as any tweak in repo rate will also affect the marginal cost and hence change the MCLR.
Here are the tenor-wise Union Bank of India MCLR effective from September 11, 2022, as per the lender’s website:
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Over night: Old Rates — 6.95 per cent; New rate — 7.00 per cent
One Month: Old Rates — 7.10 per cent; New rate — 7.15 per cent
Three Month: Old Rates — 7.35 per cent; New rate — 7.35 per cent
Six Month: Old Rates — 7.50 per cent; New rate — 7.55 per cent
One Year: Old Rates — 7.70 per cent; New rate — 7.75 per cent
Two Years: Old Rates — 7.75 per cent; New rate — 7.95 per cent
Three Years: Old Rates — 7.75 per cent; New rate — 8.10 per cent
The external benchmark lending rate of the Union Bank has been fixed at 8.20 per cent. This was changed last month.
MCLR or marginal cost of lending rate is a benchmark interest rate, which is the minimum rate of interest banks are allowed to give out loans to its customers. This rate limit is set in stone for borrowers unless specified otherwise by the Reserve Bank of India. With the increase in the MCLR, Union Bank Bank home and other loan borrowers may not be happy as the interests are most likely to go up. The MCLR will continue to surge further as the hike in the repo rate has pushed the cost of the funds for banks.
