MCLR Hike: IOB has increased the MCLR of all tenures. The bank will increase the rate by 0.05 to 0.1% from Monday.
MCLR Hike: This is a big shock for the customers of the government bank Indian Overseas Bank. Indian Overseas Bank has announced an increase in Margin Cost of Funds Based Lending Rate (MCLR). According to exchange filing, the government bank will increase MCLR by 0.05 to 0.10 percent. The bank said that MCLR rates will increase from Monday. Let us tell you that MCLR is the minimum rate below which the bank is not allowed to give loan. That means this is the minimum rate of loan given by the bank.
What is IOB’s MCLR Rate?
According to IOB, overnight MCLR is 8.05 percent, which was earlier 8 percent. One month MCLR increased by 5 basis points to 8.25, which was earlier 8.20 percent. At the same time, MCLR for 3 months is now 8.45 percent which was earlier 8.40 percent. Six month MCLR is 8.70 percent which was earlier 8.65 percent. Whereas one year MCLR is 8.85 percent which was earlier 8.80 percent. Whereas the two-year MCLR is now 8.85 percent which was earlier 8.80 percent. There has been an increase of 10 basis points in 3 year MCLR. Now MCLR has increased from 8.85 percent to 8.95 percent.
What is MCLR?
MCLR means Marginal Cost of Funds Based Lending Rate. This is the minimum rate below which no bank can give loans to customers. This means that banks cannot give loans to customers below this rate, and the more it increases, the more the interest on the loan will also go up. It is mandatory for banks to declare their overnight, one month, three month, six month, one year and two year MCLR every month.
Increase in MCLR means that interest rates on loans related to marginal cost like home loan, vehicle loan will increase. But keep in mind that when the MCLR rate increases, the interest rates on the loan do not increase immediately. The EMI of the loan borrowers progresses only on the reset date.
