Leading private lender ICICI Bank has increased its marginal cost of lending rate, or MCLR, by 20 basis points. This comes at a time when many other banks are also increasing the interest rates of RBI loans. India Earlier last month, it increased its repo rates by 50 basis points. The bank said in an announcement that the ICICI Bank MCLR rates, a key point in deciding loan interest, have been increased. According to a note on the lender’s website, the new ICICI Bank MCLR rates have already been implemented.
The new ICICI Bank MCLR rates have come into effect from July 1. The hike in the ICICI Bank MCLR rate will mean an increase in loan interest for new and existing borrowers, including home loans, vehicle loans and Equated Monthly Installments (EMIs) for any loan. Other debt related to marginal cost. This can be said to be a result of the hike in repo rates by RBI, as any change in the repo rate would also affect the marginal cost and hence change the MCLR.
ICICI Bank MCLR rates for overnight, one month and six months have been increased to 7.50 per cent, 7.50 per cent and 7.55 per cent, up by 20 bps across all tenures. For tenures of six months and one year, ICICI Bank’s MCLR rates at 7.70 per cent and 7.75 per cent respectively, have also been increased by 20 bps. In this case it should be noted that 100 bps is equal to 1 percent. Therefore, the ICICI Bank MCLR rates have been increased by 0.20 percent.
Here is the ICICI Bank MCLR effective from July 1, 2022, as per the lender’s website:
whole night: old rates – percentage; New rate – 7.50 percent
a month: old rates – percentage; New rate – 7.50 percent
three months: old rates – percentage; New rate – 7.55 percent
six months: old rates – percentage; New rate – 7.70 percent
one year: old rates – percentage; New rate – 7.75 percent
The external benchmark lending rate of ICICI Bank has been fixed at 8.60 per cent. “ICICI Bank External Benchmark Lending Rate” (I-EBLR) refers to the RBI Policy Repo Rate with Mark-up on Repo Rate. The i-EBLR is 8.60 per cent ppm with effect from June 8, 2022,” the bank says on its website.
ICICI Bank had earlier hiked its MCLR rates on June 1, a day before the RBI MPC meeting where it raised its repo rates to 4.90 per cent against the backdrop of rising inflation in the country. MCLR or marginal cost of lending rate is a benchmark interest rate, which is the minimum interest rate that banks are allowed to lend to their customers. It sets the lower limit of the interest rate for the loan. This rate range is set in stone for the borrowers unless otherwise specified by the Reserve Bank of India.
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