Leading private lender ICICI Bank has increased its marginal cost of lending rate, or MCLR, by 20 basis points across tenures. This comes at a time when several other banks are also raising their loan interest rates after the Reserve Bank of India increased its repo rates by 50 basis points early last month. ICICI Bank MCLR rates, a key point in deciding loan interests, have been hiked, the bank has said in an announcement. The new ICICI Bank MCLR rates have already come into effect, as per a note on the lender’s website.
The new ICICI Bank MCLR rates have come into effect from July 1. The ICICI Bank MCLR rate hike will mean that loan interests for new and existing borrowers are set to increase, including equated monthly installments (EMIs) for home loan, vehicle loan and any other loan related to marginal cost. This can be called a result of the RBI hiking its repo rates, as any tweak in repo rate will also affect the marginal cost and hence change the MCLR.
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ICICI Bank MCLR rates for overnight, one month and six months have been hiked to 7.50 per cent, 7.50 per cent and 7.55 per cent, hiked by 20 bps across all the tenures. For tenures of six months and one year, the ICICI Bank MCLR rates are 7.70 per cent and 7.75 per cent, respectively, also hiked by 20 bps. It must be noted in this case that 100 bps equals to 1 per cent. Therefore ICICI Bank MCLR rates have been hiked by 0.20 per cent.
Here are the tenor-wise ICICI Bank MCLR effective from July 1, 2022, as per the lender’s website:
Over night: Old Rates — per cent; New rate — 7.50 per cent
One Month: Old Rates — per cent; New rate — 7.50 per cent
Three Month: Old Rates — per cent; New rate — 7.55 per cent
Six Month: Old Rates — per cent; New rate — 7.70 per cent
One Year: Old Rates — per cent; New rate — 7.75 per cent
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The external benchmark lending rate of ICICI Bank has been fixed at 8.60 per cent. “ICICI Bank External Benchmark Lending Rate” (I-EBLR) is referenced to RBI Policy Repo Rate with a mark-up over Repo Rate. I-EBLR is 8.60 per cent p.a.p.m. effective June 8, 2022,” says the bank on its website.
ICICI Bank had previously hiked its MCLR rates on June 1, days before the RBI MPC meet, where it increased its repo rates to 4.90 per cent against a backdrop of rising inflation in the country. MCLR or marginal cost of lending rate is a benchmark interest rate, which is the minimum rate of interest banks are allowed to give out loans to its customers. It dictates the lower limit of the interest rate for a loan. This rate limit is set in stone for borrowers unless specified otherwise by the Reserve Bank of India.
