Private sector lender IndusInd Bank has raised its marginal cost of funds-based lending rates (MCLR) for select tenures by up to 10 basis points (bps). The new lending rates were effective from Thursday, June 22, 2023, according to the bank’s website. Following the hike in lending rate, its overnight to three-month MCLR rate has been increased by 10 bps while six-month lending rate has been hiked by 5 bps.Currently, the overnight MCLR stands at 9.35 percent. The MCLRs for one-month, three-month and six-month will be 9.40 percent, 9.70 percent and 10 percent, respectively, The one-year MCLR, which is connected to many consumer loans, will now be 10.20 percent, the two-year MCLR will be 10.25 percent, and the three-year MCLR will be 10.30 percent.
| MCLR | Benchmark MCLR (%) |
|---|---|
| Overnight | 9.35% |
| 1 month | 9.40% |
| 3 month | 9.70% |
| 6 month | 10.00% |
| 1 year | 10.20% |
| 2 year | 10.25% |
| 3 year | 10.30% |
Shares of IndusInd Bank were trading 0.77 percent lower at Rs 1,276.70 apiece on Thursday. The banking stock has gained 4 percent so far this year and risen 64 percent in the last one year.
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RBL Bank cuts MCLR, EMIs to go down
Meanwhile, Mumbai-headquartered RBL Bank has slashed its MCLR by 10 bps across tenures from June 22, 2023. After the rate reduction, the private sector bank’s overnight MCLR has been slashed by 10 bps to 9.15 percent. Earlier, it was 9.25 percent. The one-month MCLR dropped from 9.30 percent to 9.20per cent, according to the lender’s website.The three-month MCLR was cut by 10 bps to 9.50 percent. Earlier, it was 9.60 percent. RBL Bank reduced the six-month MCLR by 10 bps to 9.90 percent. Earlier, it was 10 percent.
| Benchmark Tenor | Benchmark Rate p.a. |
| Overnight | 9.15% |
| One Month | 9.20% |
| Three Month | 9.50% |
| Six Month | 9.90% |
| One Year | 10.10% |
The stock of RBL Bank were at Rs 167.25 per share, down 2.85 percent in trade Thursday. RBL Bank shares have fallen 8 percent on a year-to-date basis, while it rallied 95 percent in the last one year.
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Loans, including home, personal or auto (floating rate loans), which are linked to MCLR will get the relief after the MCLR cut. A change in the repo rate impacts the MCLR rate.
As was widely expected, the Reserve Bank of India (RBI), earlier this month, said it is keeping its key policy rate, the repo rate, unchanged at 6.5 percent. This is the second time in two months that the repo rate has been left as is.
The central bank had started an interest rate hike cycle in May last year to tame inflation, after keeping interest rates low throughout the Covid-19 pandemic to support growth. That hike cycle saw a 2.5 percent (250 bps) increase in repo rates, making loans costlier for consumers and industry.
