The Indian Overseas Bank (IOB) has raised its Marginal Cost of Funds Based Lending Rate (MCLR) by 15 basis points (bps) to 35 bps across tenures. The new rates will be effective from 10 December. The bank has also hiked its Repo Linked Lending Rate (RLLR). The one-year MCLR has been increased by 20 bps to 8.25 per cent from 8.05 per cent, while the two-year MCLR has been raised by 25 bps to 8.35 per cent. The bank has hiked the three-year MCLR rate by 30 bps to 8.4 per cent. The MCLR on the six-month tenure has increased 20 bps to 8.15 per cent from 7.95 per cent.
Read More: What Is UPI’s Single-Block-And-Multiple-Debits Facility? Uses, Benefits; Full Details Here
The revised Indian Overseas Bank MCLR stands at 8 per cent on a three-month tenure, a hike of 15 bps from 7.85 per cent. The bank has raised the MCLR by 20 bps to 7.7 per cent from 7.5 per cent on one-month tenure. IOB has raised the overnight MCLR to 7.65 per cent from 7.3 per cent.
The increase in benchmark lending rate comes after the Reserve Bank of India (RBI) hiked the repo rate by 35 bps to 6.25 per cent on 7 December. Due to this, the term loan Equated Monthly Instalments (EMIs) are expected to rise. The RBI has hiked the repo rate by 225 bps so far in FY23. Due to this, the Standing Deposit Facility (SDF) rate, was adjusted to 6 per cent, while the Bank Rate and Marginal Standing Facility (MSF) were adjusted to 6.5 per cent.
Read More: Paisabazaar and RBL Bank launch ‘Duet’ credit card for cashbacks and instant money transfer
Various other banks across the country have been hiking the MCLR since the RBI began to hike the repo rate in May 2022 to contain inflation. For instance, HDFC Bank recently hiked the MCLR by 10 bps. The new rates came into effect on 7 December.
It raised the overnight MCLR to 8.3 percent, up by 10 bps from 8.2 percent. The MCLR for one-month tenure stands at 8.3 percent. The lender’s three-month and six-month MCLRs are now 8.35 per cent and 8.45 per cent, respectively. The one-year, two-year, and three-year MCLR now stands at 8.6 per cent, 8.7 per cent, and 8.8 per cent, respectively.
