A cashier counts Indian rupee banknotes in the Byculla area of Mumbai, India, (Photographer: Dhiraj Singh/Bloomberg)

Syndicate Bank, Oriental Bank Of Commerce, Bank Of India Raise Rates By Up To 0.15%

Three state-owned lenders today announced raising interest rate in the range of 0.05-0.15 percent, to be effective next week.

Bank of India has hiked the MCLR by 0.10 percent each for various tenors; Oriental Bank of Commerce raised its marginal cost-based lending rate by 0.10-0.15 percent and Syndicate Bank induced a change of 0.05 percent for one-year tenor loan.

The hike follows the Reserve Bank of India’s move of raising the key lending rate by 0.25 percent, citing inflation concerns on rising oil rates globally.

Also read: MPC Hikes Interest Rates For The First Time In Over Four Years  

Bank of India said in a statement that it has revised the MCLR for one year to 8.50 percent, while the overnight rate is up by 10 basis points to 7.90 percent. Among others, the one-month and three-month MCLR have been enhanced by 0.10 percent or 10 basis points each to 8.20 percent and 8.30 percent, respectively.

The MCLR of six-month tenor will now bear an interest rate of 8.45 percent, up 0.10 percent from current rate of 8.35 percent. Bank of India said the enhanced rates would come into effect from June 10.

OBC has raised its lending rates for select tenors by up to 0.15 percent to be effective from June 11. It said the bank has decided to increase MCLR by 10 bps to 15 bps (0.10 -0.15 percent) across various tenors. These MCLR rates shall be applicable from June 11 until next review by the bank, the state-owned lender said. For loans of one-year tenor, the rate has been increased by 0.15 percent to 8.65 percent, and that for six-months has been raised by a similar quantum to 8.60 percent.

Also read: Banks In Wait And Watch Mode After MPC Hikes Repo Rate

One month MCLR rate is also revised up by 0.15 percent to 8.35 percent. For overnight and 3-month tenors, the new rates will be up by 0.10 percent each to 8.20 percent and 8.40 percent respectively.

While Manipal-based Syndicate Bank has raised the MCLR on one-year loans to 8.55 percent from the earlier 8.50 percent, this rate will come into effect from June 10. The bank has, however, kept the MCLR unchanged for all other tenors.

Big lenders such as SBI, ICICI Bank Ltd. and HDFC Bank Ltd. have already increased their MCLR, making consumer loans such as auto, home and business loans costly. Among those who have joined the bigger banks include private sector’s Karur Vysya Bank Ltd. and Indian Bank.

Banks review the MCLR every month, which is a uniform methodology introduced from April 2016 to ensure fair interest rates to borrowers as well as banks.