The country’s leading banks, including ICICI Bank, Punjab National Bank, and Bank of India, have increased the interest rates on almost all period home loans. This has dealt a significant blow to millions of borrowers of these banks. Customers will now have to pay higher EMIs on their loans. ICICI Bank, Punjab National Bank, and Bank of India have increased the Marginal Cost of Funds Based Lending Rate (MCLR) on all types of loans, including home loans, for all periods. According to the banks’ websites, these new rates came into effect on August 1, 2023. MCLR is the minimum rate below which no bank can lend. The interest rate on loans is determined through MCLR.
ICICI Bank
ICICI Bank has increased the MCLR by 5 basis points for all periods. According to the ICICI Bank website, the overnight MCLR has been increased from 8.35% to 8.40%. The MCLR for three months and six months has been raised to 8.45% and 8.80%, respectively. The one-year MCLR has been increased to 8.90%.
Punjab National Bank
As per the PNB website, the overnight MCLR has been set at 8.10%. The MCLR for one month is 8.20%. The MCLR for three months and six months are 8.30% and 8.50% respectively. The one-year MCLR is now 8.60%, and for three years, it is 8.90%.
Bank of India
Bank of India has revised its MCLR rates and increased the rates for selected periods. As per the Bank of India website, the overnight MCLR is 7.95%, and the one-month MCLR is 8.15%. The MCLR for three months and six months are 8.30% and 8.50% respectively. The one-year MCLR is 8.70%, and for three years, it is 8.90%.
EMIs of customers to increase
Marginal Cost of Funds Based Lending Rate (MCLR) is the minimum benchmark rate at which banks lend to their customers. Any change in the MCLR by the bank affects the cost of the loan, i.e., the interest rate, which directly impacts the customers in the form of higher Equated Monthly Installments (EMIs).
