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Mumbai
Bank of Maharashtra (BoM) has increased its marginal cost of funds-based lending rate (MCLR) by up to 25 basis points (bps) across all tenors with effect from August 18.
Following the MCLR hike, interest rate on corporate loans will go up. Most of the corporate loans are linked to MCLR. One basis point is equivalent to one-hundredth of a percentage point.
With the latest MCLR increase, the one-year and six-months MCLR are now at 7.60 per cent (against 7.50 per cent earlier) and 7.50 per cent (7.40 per cent), respectively.
The new rates in other tenors are: 7.10 per cent for overnight (against 6.90 per cent earlier), 7.25 per cent one-month (7.00 per cent earlier), and 7.40 per cent for three-months (7.20 per cent earlier).
MCLR comprises of Marginal cost of funds; Negative carry on account of Cash Reserve Ratio; Operating costs; and Tenor premium.
As per RBI data, 53.1 per cent of scheduled commercial banks’ loans were linked to MCLR as at December-end 2021. Further, 39.2 per cent of the loans (retail and MSME) loans were linked to the external benchmark-based lending rate (EBLR). EBLR is usually linked to the policy repo rate.
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