The RBI’s six-member Monetary Policy Committee had raised the benchmark repurchase or repo rate to 6.50% in its latest bi-monthly policy review. This was the sixth straight increase in interest rates since May last year, and the cumulative hike now totals 250 bps.
State-owned Bank of Baroda (BoB) has increased its MCLR by 5 bps across all tenors from February 12. The bank has revised one-year MCLR to 8.55% from 8.5%. The overnight, one-month and three-month MCLRs stand at 7.9, 8.2 and 8.3%, respectively, according to its website.
Another state-run lender Indian Overseas Bank (IOB) has raised its MCLR by up to 15 bps across all tenors. Its one-year MCLR is up to 8.45% from 8.30% now. Similarly, one-month, three-month and six-month MCLRs are up by 15 bps to 7.9, 8.2 and 8.35%, respectively, while its overnight, two-year and three-year MCLRs have been revised upwards by 10 bps.
Both the banks have not increased their deposit rates yet. SBI on Wednesday increased the MCLR-linked loans by 10 bps across the overnight and up to three year category of loans – varying from 7.95% to 8.70%.
The nation’s largest lender also increased deposit rates by 5-25 bps effective February 15. With the revised rates, senior citizens will get 8.5% on deposits of over five years, while others will get 5 bps more on three year funds and 25 bps on longer-term funds.
However, the rate hikes by SBI, BoB and IOB are only for corporate borrowers as the increases are applicable to loans linked to MCLR.