Following the Reserve Bank of India’s decision to raise the repo rate, Axis Bank, one of India’s largest private sector banks, has increased its Marginal Cost of Lending Rates (MCLR) by 10 basis points. Customers who have taken out home, car, education, personal, and other loans will be affected by the increase in MCLR, which will take effect on February 19, 2023.
The bank’s 3-month MCLR has increased from 8.70 percent to 8.80 percent, while its overnight MCLR has increased from 8.60 percent to 8.70 percent. The 6-month MCLR is now 8.85 percent, up from 8.75 percent. The MCLR for a loan that lasts one year has increased from 8.80 percent to 8.90 percent, while the MCLR for loans that last two and three years has increased from 8.90 percent to 9.00 percent and 9.05 percent, respectively.
After Kotak Mahindra Bank also increased its MCLR by 5 basis points, this decision was made. The new rates will go into effect on February 16, 2023. On February 8, 2023, the Reserve Bank of India increased the repo rate by 25 basis points in an effort to control India’s rising inflation. As a result, a lot of banks, like Punjab National Bank, State Bank of India, and Bank of Baroda, have raised interest rates on loans and fixed deposits.
Customers will be required to pay a higher Equated Monthly Instalment (EMI) on their loans as a result of the rise in MCLR. MCLR is the base rate at which the bank offers credits to its clients, and on the off chance that a bank builds MCLR, the credit financing costs consequently increment. The Reserve Bank of India introduced MCLR in 2016 with the intention of increasing transparency and equity in lending rates based on the actual cost of funds.
