3 banks including PNB gave shock to lakhs of customers, now EMI will have to be paid more than before
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New Delhi (Best Hindu News): ICICI Bank, Punjab National Bank and Bank of India, which are among the major banks of the country, have made almost all types of loans including home loans costlier. Due to this, lakhs of loan holders of all the three banks have got a big blow. Customers will now have to pay more EMI of the loan. These three banks have increased the Marginal Cost of Funds Based Lending Rate (MCLR). According to the websites of banks, the new interest rates have come into effect from August 1.
ICICI Bank
ICICI Bank has increased MCLR by 5 bps for all tenures. Overnight, the one-month MCLR rate has been increased from 8.35 per cent to 8.40 per cent, according to ICICI Bank’s website. ICICI Bank has increased the three-month, six-month MCLR to 8.45 per cent and 8.80 per cent, respectively. At the same time, the one-year MCLR rate has been increased from 8.85 percent to 8.90 percent.
Bank of India
Bank of India (BOI) has increased the MCLR on select term loans. The bank has reduced the MCLR to 7.95 per cent for overnight loans and 8.15 per cent for one month. The MCLR rate for three months and six months has been kept at 8.30 per cent and 8.50 per cent respectively. The bank has fixed the MCLR at 8.70 per cent for one year and 8.90 per cent for three years.
PNB increased this much
Punjab National Bank (PNB) has reduced the overnight MCLR to 8.10 per cent. For one month tenure, the MCLR has been kept by the bank at 8.20 per cent. At the same time, the MCLR for three, months and six months is now 8.30 per cent and 8.50 per cent. The MCLR for one year is now 8.60 per cent and for three years it is 8.90 per cent.
What is MCLR?
From April 2016, instead of the interest charged for the loan, banks have started using MCLR. When you take a loan from a bank, the minimum rate of interest charged by the bank is called the base rate. The bank cannot give loan to anyone at a rate lower than the base rate. Banks are now using MCLR instead of this base rate. It is calculated on the basis of marginal cost of funds, term premium, operating expenses and cost of maintaining cash reserves ratio. Later on the basis of this calculation the loan is given. It is cheaper than the base rate. Because of this, loans like home loans have also become much cheaper since its implementation.
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