After SBI increased it lending rate for the first time since the implementation of the new MCLR benchmark on Thursday, PNB and ICICI Bank have also followed suit with an MCLR hike of 15 basis points. 1bps is one-hundredth of a percentage point.
ICICI Bank's one-year MCLR has been upped to 8.3% with an hike by 10 bps while PNB has
MCLR or marginal cost of lending rates is influenced by the market rates and any change in the cost of funds or bond yield hardening would automatically increase the cost for loan borrowers.
Change in SBI's MCLR rate for different maturities
Six-month MCLR of SBI has been increased to 8% with a hike of 10 bps.
One-year MCLR has been hiked by the SBI to 8.15% with a hike of 20 basis points against the earlier 7.95%.
Two-year MCLR now stands at 8.25% with a hike of 20 bps
Three-year MCLR cost has now increased to 8.35% with an increase of 25 bps.
Other banks including Axis, HDFC and IndusInd Bank have already begun hiking their cost of lending with the increase in bond yield.
The hike of upto 50 basis points in the retail and bulk deposit rates has been as it is passed on to loan borrowers. But the interest of lower income groups and those seeking affordable housing with a home loan of upto Rs. 30 lakh shall be only marginally affected as the rate hike for them has just been nominal at 5 basis points.