The increase in PNB MCLR will mean that loan EMIs for the bank’s existing and new customers are going to increase soon.
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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 10 basis points, said Punjab National Bank. The PNB MCLR rate hike comes at a time when the Reserve Bank of India’s Monetary Policy Committee is set to start its scheduled deliberations and is expected to go with another rate hike to tame inflation. The new PNB MCLR rates have come into effect from August 1, Monday.
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 6.90 per cent to 7.00 per cent, while its rates for one month, three months and six months have been increased by 10 bps each to 7.05 per cent, 7.15 per cent and 7.35 per cent respectively. On the other hand, MCLR for one year has increased by 10 bps from 7.85 per cent to 7.95 per cent with effect from Monday, according to a notification on the state-owned lender’s website.
Here are the tenor-wise MCLR effective from August 1, 2022, as per the PNB website:
Over night: Old rate — 6.90 per cent; New rate — 7.00 per cent
One Month: Old rate — 6.95 per cent; New rate — 7.05 per cent
Three Month: Old rate — 7.05 per cent; New rate — 7.15 per cent
Six Month: Old rate — 7.25 per cent; New rate 7.35 per cent
One Year: Old rate — 7.55 per cent; New rate 7.65 per cent
Three Years: Old rate — 7.85 per cent; New rate 7.95 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 September, then he or she will have to pay the hiked EMIs from September. Till then, the borrower will pay on basis of their existing rates.
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To control inflation, the Reserve Bank of India (RBI) in early June raised the key repo rate by 50 basis points (bps), which was the second hike within almost as month after the central bank’s Monetary Policy Committee increased 40 basis points in off-cycle policy review in May. The retail inflation in May stood at 7.04 per cent, which is higher than the RBI’s target limit of 2-6 per cent.
