Just a day before the RBI's verdict on monetary policy, Bank of Baroda has raised the marginal cost based lending rate by 5 basis points across different tenures. One basis point is one-hundredth of a percentage point. The new rates have been made effective from June 7, 2018. With the rate hike, the new one-year MCLR is 8.45% against the existing 8.40%.
The MCLR rate for all other tenures- overnight, 1, 3 and 6 months will be 7.95%, 8%, 8.1% and 8.3% respectively.
Banks since the beginning of this calendar year have been increasing the cost of lending even as the RBI maintained its status quo as yields have been rising continuously over the past few months.
Last week, leading lenders SBI, PNB, Union Bank, HDFC Bank, ICICI Bank and Kotak Mahindra increased MCLR rate as liquidity concerns weighed on banks. One-year MCLR at SBI, PNB and ICICI Bank now stands at 8.25%, 8.40% and 8.40% respectively.
In a statement, the bank said that the higher MCLR rate is owing to the increasing interest rate regime as well as higher cost of funds.
All loans as well as credit limits renewed with effect from April 1, 2016 are pegged at a price with MCLR as the benchmark.