Mumbai: State-owned Punjab National Bank raised the marginal cost of funds-based lending rate (MCLR). The lending rate is hiked by 0.05 per cent, or 5 basis points, across tenors.
As a result, interest rates on loans are expected to rise by a similar amount, causing EMIs on linked loans to increase. MCLR is the minimum rate of interest banks are allowed to give out loans to its customers. It is a benchmark interest rate and it dictates the lower limit of the interest rate for a loan.
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The benchmark one-year tenor MCLR, which is used to price most consumer loans such as auto and personal, will be at 8.90 per cent against the earlier rate of 8.85 per cent. The three-year MCLR stands at 9.20 per cent, up 5 basis points.
Among others, the rate of one-month, three-month and six-month tenors will be in the range of 8.35-8.55 per cent. The MCLR on overnight tenor will be 8.30 per cent against 8.25 per cent.
On Wednesday, another public sector lender Bank of India also announced an increase in MCLR by 5 basis points for one year tenor to 8.95 per cent. However, the rates were unchanged for the remaining tenors.
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