Loans to be costlier

State Bank of India, and someother large banks have started incresing their benchmark lending rate which is otherwise termed as MCLR (Marginal cost of diunds based lending rate) which would result in customers paying more interest on their housing, auto and other retail loans.

To quote:

1. SBI increased its MCLR by 10 basis points wef 15 April across all tenors (100 bps=1 percentage point).
2. The one year MCLR has been revised to 7.1 per cent while two and three year MCLRs have been raised to 7.3 per cent and 7.4 per cent respectively.
3. Axis Bank, the third largest private sector banking in the country has hiked its MCLR by 5 basis points wef 18^th April 2022
4. Kotak Mahindra Bank increased its one year MCLRby 5 bps to 7.4 per cent from April 16, 2022.
5. Bank of Baroda increased its MCLR by 5 basis points wef 12^th April 2022.

Banks have increased their MCLR after RBI turned its attention on inflation from supporting growth, in the recent monetary policy review meeting. This was with a view to withdraw any sort of accommodation.

Note:

MCLR is a benchmark interest which is the mnimum rate at which banks are permitted to lend.  Most loans are linked to the one year MCLR.