Axis Bank has announced an increase in the marginal cost of funds based lending rate (MCLR). According to the Axis Bank website, MCLR rates across tenors have been raised by 5 basis points. The new rates are effective from April 18, 2022.The one-year benchmark tenor MCLR will rise to 7.40 per cent, likewise, two-year and three-year tenor MCLR will rise to 7.50 per cent and 7.55% respectively.
The overnight, one-month, three-month, and six-month MCLRs have been hiked by 0.05 per cent each to 7.20%, 7.30% and 7.35%, respectively. A rise in the MCLR will typically increase interest due by borrowers. The increase in the MCLR will affect existing borrowers' EMIs when their loan reset dates arrive. SBI increased its MCLR by 10 basis points, with effect from April 15, across all tenors. Kotak Mahindra Bank increased its one-year MCLR by 5 bps to 7.4 per cent from April 16. Bank of Baroda increased its MCLR by 5 basis points, with effect from April 12.MCLR is the minimum lending rate below which a bank is not permitted to lend. MCLR replaced the earlier base rate system to determine the lending rates for commercial banks. RBI implemented MCLR on April 1 2016, to determine interest rates for loans.