1-year median MCLR rise moderates in August, up 40 bps since June

Foreign banks have raised it the most, median rate up 90 bps; just 20-bp rise for private banks

The rise in one-year median marginal cost of fund-based lending rate (MCLR) of commercial banks moderated to 10 basis points (bps) in August from a hike of 15 bps in July. It has risen 40 bps since June.

This comes on the back of the Reserve Bank of India (RBI) raising the repo rate by 140 bps to 5.4 per cent in the current tightening cycle.

Anil Gupta, co-group head, financial sector ratings at ICRA, said banks will be calibrated in revising the MCLR, as they have to be competitive vis a vis other sources of borrowings, i.e. bonds and