Lending rates have been rising at banks. With effect from August 12, the public sector lender Canara Bank increased the rates for house loans and other loans. The marginal cost of funds-based lending rate (MCLR) was raised in August by several of India’s leading banks, including HDFC Bank, ICICI Bank, Bank of Baroda, and Bank of India.
Following the most recent increase, Canara Bank’s overnight MCLR is 7.95% and its one-month MCLR is 8.05%.The three-month MCLR is 8.15%, compared to the six-month MCLR of 8.50. The bank’s MCLR is 8.70% for a 1-year tenor.
The above MCLRs shall only be applicable to new loans/advances sanctioned/first disbursement made on or after 12.03.2023 and those credit facilities renewed/reviewed/reset undertaken and where switchover to MCLR linked interest rate is permitted at the borrower’s option, on or after 12.03.2023. The above-mentioned MCLRs will be in effect until the next review, according to an official statement from Canara Bank.
It is true that new loan borrowers will be immediately impacted by an increase in bank interest rates. Banks typically lengthen loan terms rather than increasing monthly EMIs when they raise interest rates on their retail loans.
Bank of India, Punjab National Bank, and ICICI Bank have all updated their loan-related marginal cost-based lending rates (MCLR). According to the bank websites, the new interest rates are applicable as of August 1. The lenders announced on their websites that the new interest rates take effect on August 1, 2023.
For the third time in a row, the Reserve Bank of India (RBI) kept its main policy rates steady. The MPC unanimously decided to maintain the benchmark repurchase rate (repo) at 6.50 percent. Shaktikanta Das, the governor of the RBI, disclosed the meeting’s results on August 10.
