MUMBAI: Ahead of the Reserve Bank of India’s monetary policy committee (MPC) meeting where it decides on rates, a host of lenders have increased interest rates on loans by 10 basis points (100bps = 1 percentage point) . State Bank of India (SBI), HDFC, ICICI Bank, Kotak Bank, Union Bank and Punjab National Bank (PNB) are all who have hiked rates. The MPC will announce its decision on June 6.
The marginal cost of lending rate (MCLR) is reviewed every month by banks and reflects their cost of funds. Following the latest hike, SBI’s one-year MCLR stands at 8.25 per cent versus 8.15 per cent earlier. This is the second rate hike by the bank in 2018. While HDFC has increased its retail prime lending rate (PLR) — its benchmark for home loans — by 10bps, ICICI Bank also hiked its one-year MCLR by 10bps to 8.40 per cent.
PNB has hiked one-year MCLR to 8.4 per cent from 8.3 per cent earlier. Union Bank increased rates by 10bps to 8.45 per cent. But Kotak Bank has increased its one-year MCLR by a sharp 20bps to 8.9 per cent.
Following this, HDFC’s home loans will start at 8.5 per cent. The new rates come into effect from June 2, 2018 and is due to increase in cost of wholesale funds.