Last Updated: January 17, 2023, 14:27 IST
Private lender Kotak Mahindra Bank on Monday increased the marginal cost of funds-based lending rate (MCLR) for several loan sectors across tenures by 10 to 30 basis points (bps). The revised MCLR rates came into effect on January 16, 2023.
The lowest interest rate that a bank can impose on a loan is known as the MCLR (Marginal Cost of Funds Based Landing Rate). Under the MCLR regime, banks are allowed to provide any loan at either a fixed or floating interest rate. As a result, the bank will not provide loans at a rate less than the MCLR for that specific maturity.
The MCLR ranges from 8.15% to 9.15%, according to the Kotak Mahindra Bank’s official website, depending on the duration. Kotak Mahindra Bank raised its 1-year MCLR earlier in November by 10 basis points. The decision will increase the cost of EMIs. The EMI on a term loan is anticipated to rise with the increase in MCLR.
The majority of consumer loans use a lending rate based on a year’s marginal cost. Due to the rise in MCLR in this case, personal loans, vehicle loans, and home loans may become more expensive. The revised tenors are as follows-
The Marginal Cost of Funds based Lending Rate (K-MCLR) for an overnight tenor is 8.15% and 8.40% for a tenor of 1 month. For a tenor of 3 months, the MCLR stood at 8.55%, and 8.75% for a tenor of 6 months. The 1-year MCLR is 8.95% and the 2-year MCLR is now at 9.00%, whereas the 3-year MCLR is 9.55%, according to the bank. In the range of 7.65 to 16.40 per cent, Kotak Mahindra Bank adjusted the MCLR rates in January.
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