MCLR

Rupee-denominated fund-raising would be worth Rs 20,000-25,000 crore in FY24, says export finance institution

Experts said, generally, in an easing cycle banks tend to reduce the interest rates on deposits faster than on loans to protect their margins

Interest rates on fresh deposits have moved up faster than fresh loans

Following the RBI MPC's repo rate hike earlier this month, many banks like Bank of Baroda, Bank of India, and Punjab National Bank have also hiked their key lending rates

Marginal cost of funds-based lending rate (MCLR) is the minimum interest rate below which a bank cannot lend, except in certain cases

'NBFCs need to be wary of rising borrowing costs as financial conditions tighten'

This comes after RBI's monetary policy committee raised repo rate by 35 bps earlier this month to take it to 6.25%

State-owned Bank of Baroda on Thursday said it has increased its marginal cost of funds based lending rate by up to 15 basis points (bps) across tenors. The lender has approved the revision in marginal cost of funds based lending rate (MCLR) with effect from November 12, 2022, Bank of Baroda said in a regulatory filing. The benchmark one-year tenor MCLR has been raised by 10 basis points to 8.05 per cent. It is the rate at which most of the consumer loans such as personal, auto and home are tied to. Among others, the overnight rate has been raised to 7.25 per cent from 7.10 per cent earlier. The one, three and six-month MCLRs were raised by 10 basis points each to 7.70 per cent, 7.75 per cent and 7.90 per cent, respectively.

State-owned Bank of Maharashtra on Wednesday said it has increased its marginal cost of funds based lending rate (MCLR) for select tenor loans. The benchmark one-year MCLR, used to price most of consumer loans such as auto, personal and home, has been revised upwards to 7.90 per cent from 7.80 per cent, the lender said in a regulatory filing. The revised MCLR has come to effect from November 7, 2022. The one-month MCLR has been raised by 5 basis points to 7.50 per cent. Rates for other tenor loans like overnight, three and six months have been kept unchanged. Bank of Maharashtra stock traded at Rs 24.25 apiece on BSE, up by 4.08 per cent.

Strong loan growth, rising lending rates give the boost

Private sector DCB Bank has revised upwards the marginal cost of funds-based lending rate by 27 basis points across tenors. The revised rates will come to effect from November 5, 2022, DCB Bank said in a regulatory filing on Friday. The benchmark one-year MCLR rate will be priced at 10.23 per cent from Saturday against the existing rate of 9.96 per cent. The one-year tenor MCLR is used to price most of the consumer loans, such as housing, auto and personal. The one, three and six-month tenor MCLRs will be 9.63 per cent, 9.79 per cent and 10.02 per cent, respectively. While the overnight tenor MCLR will be 9.58 per cent.

CASA occupies a 45% share in overall bank deposits; it is FDs, which make the remaining 55%, which will need the rate adjustment

MPC has increased the repo rate by 140 bps cumulatively since May in an effort to rein in inflation

Achieving 20% growth going forward remains a challenge; deposits for week ended August 26 up 9.5%

Loan rates going up after central bank's rate-setting committee hiked benchmark policy rate by 50 basis points

New rules are introduced on September 1, Thursday 2022. Banking norms, gas cylinders, insurance premiums and property prices will be impacted. Read this detailed article to know more

Banks change lending policy to keep up with monetary policy committee's raising repo rate

The views expressed in the paper are those of the authors and not necessarily those of the institution to which they belong

Using different models, the paper estimates the degree of pass-through of monetary policy to bank lending rates under both the base rate and the MCLR regimes using dynamic panel data regression.

The interest rate hike comes after the Reserve Bank of India's (RBI's) six-member monetary policy committee (MPC) raised the benchmark repo rate by another 50 bps to 5.40 per cent last week