Two private sector lenders IndusInd Bank and RBL Bank have made key changes in their marginal cost of funds-based lending rates (MCLR) for select tenures. While IndusInd has increased its MCLR rate by 5 basis points to 10 basis points, on the contrary, RBL Bank has trimmed this benchmark lending rate by 10 basis points. The new rates have come into effect from June 22, 2023.
IndusInd Bank:
IndusInd increased MCLR by 10 bps for overnight to three-month tenures, however, the hike was 5 bps on six-months tenure.
For a six-month tenure, MCLR is at 10%. While MCLR is at 9.40% on a one-month and at 9.70% on three-month tenure.
Overnight MCLR is at 9.35% here.
As per the bank’s website, the 1-year MCLR is now at 10.20%. Meanwhile, on 2-year and 3-year tenure, the MCLR is at 10.25% and 10.30% respectively.
With the latest hike in MCLR on select tenures at IndusInd, EMIs on various loans such as personal loans, home loans, and auto loans are likely to go up.
On BSE, IndusInd Bank’s share price closed at ₹1273.35 apiece, down by ₹13.40 or 1.04%.
RBL Bank:
Unlike IndusInd, RBL Bank reduced its MCLR by 10 bps across tenures.
Now, RBL levies MCLR of 9.15% for overnight tenure compared to earlier 9.25%. One-month and three-month tenures have an MCLR of 9.20% and 9.50% from June 22, 2023, compared to their previous 9.30% and 9.60%.
Also, the six-month MCLR plunged to 9.20% from the earlier 9.30%.
One-year MCLR is now at 10.10%. Earlier, the lending rate was 10.20%.
On its website, RBL said, “All rupee loans sanctioned and credit limits renewed (other than exceptions permitted by RBI) will be priced with reference to the tenor-based MCLR as mentioned above.”
Following the latest rate cut, EMIs on term loans are likely to go down.
RBL Bank’s share price dipped by ₹4.80 or 2.79% to end at ₹167.20 apiece on BSE.
Last month, RBL increased its MCLR rate by 20-25 bps.
Generally, MCLR is a benchmark that works as the minimum interest rate which banks require to charge for a specific loan. Simply put, banks cannot go lower than MCLR rates in offering their term loans like personal loans, car loans, home loans, and education loans among others.
However, not all term loans will be affected by the change in MCLR rates. Since external benchmark lending rates and repo-rate-linked lending rates have come into the picture, not all term loans are linked to MCLR.
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Updated: 22 Jun 2023, 10:14 PM IST