Bank Of Maharashtra, Karur Vysya, Raise Lending Rates

State-owned Bank of Maharashtra on Monday said it has raised the marginal cost of funding based lending rate (MCLR) across tenors by 0.15 per cent. Meanwhile, Karur Vysya Bank also announced that it has revised the external benchmark rate to 7.45 per cent from 7.15 per cent. This is to inform that the bank has reviewed the marginal cost of funds based lending rate, which has come to effect from May 7, 2022, Bank of Maharashtra said in a regulatory filing.

The benchmark one-year MCLR -- against which most of the personal, auto and home loans are linked -- has been raised to 7.40 per cent from 7.25 per cent earlier. The other tenor ranging from overnight to one-three and six months have also seen a hike in MCLR by the same margin from 6.85-7.30 per cent. Further, the bank said it has raised the repo linked lending rate (RLLR) from 6.80 per cent to 7.20 per cent per annum with effect from May 7, 2022. Several banks have hiked the repo linked lending rates following RBI's out of turn hike in repo rate by 0.40 per cent to 4.40 per cent last week.

The hike in the external benchmark or repo linked lending rate makes most of the consumer loans pricey, such as auto, home and personal. Private sector lender Karur Vysya Bank in a separate filing said that it has revised the external benchmark rate -- Repo Linked (EBR-R) -- of the bank with effect from May 9, 2022, to 7.45 per cent from 7.15 per cent.

In September 2019, the Reserve Bank had advised all banks to mandatorily link the interest rate to an external benchmark (which is the repo rate) for all new floating rate personal or retail loans as well as for floating-rate loans to MSMEs, with effect from October 1, 2019. The MCLR system came into effect on April 1, 2016. Shares of Bank of Maharashtra traded at Rs 16.90 apiece on BSE, down by 0.29 per cent; and Karur Vysya Bank fell 2.17 per cent to Rs 45.05.

(PTI)