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New Delhi: Following the State Bank of India (SBI), Kotak Mahindra Bank raised the marginal cost of lending rate (MCLR) by five basis points across all tenors. The new MCLR rates took effect on April 16, 2022. This could result in increased home, auto and other loan EMIs for current and future borrowers.Also Read – RBI Grade B Recruitment 2022: Last date to apply for 294 positions today. Apply at rbi.org.in
Lending rate based on marginal cost of funds
| Tenor | Reference | Rate |
| Overnight | K-MCLR Y/N | 6.65% |
| A month | K-MCLR 1M | 6.90% |
| Three months | K-MCLR 3M | 6.95% |
| Six months | K-MCLR 6M | 7.25% |
| One year | K-MCLR 1Y | 7.40% |
| Two years | K-MCLR 2Y | 7.70% |
| Three years | K-MCLR 3 years | 7.90% |
Earlier on Monday, the SBI raised the marginal cost of lending rate (MCLR) on loans at all maturities by 10 basis points. One basis point equals one hundredth of a percentage point Read also – SBI customer alert! EMI for home, auto loans are likely to be expensive as the bank increases the MCLR. Details inside
For the uninitiated, banks will need to set interest rates for different types of customers based on the MCLR. Taking into account the repo rate and other lending rates, banks revise the MCLR on a monthly basis. Read also – Diego Maradona and India’s inflation problems: a special link | Explain
Five reference rates are required for different durations ranging from 1 day to 1 year. Banks are free to set rates for terms longer than 1 year. Banks cannot lend below MCLR, but there are some exceptions. For deposit loans and loans to employees of the relevant bank, banks can lend below the MCLR.
