2024-04-15 17:48:35
New Delhi: Government sector Bank of Baroda has shocked the customers. The bank has increased the interest rate. MCLR has been increased. Recently, the repo rate was kept constant at 6.5 percent by the Reserve Bank of India. Even after this, the interest rate has been increased by the bank. Bank of Baroda has increased its Marginal Cost Fund Based Lending Rate (MCLR) by 0.05 per cent for 4 tenures from April 12, 2024. Now with the implementation of these new rates, the overnight MCLR is 8.10 percent, which was earlier 8.05 percent. Now MCLR for 3 months will be 8.45 percent. Earlier it was 8.40 percent. Six month MCLR is 8.65 percent. The MCLR of one year will be 8.85 percent. Similarly, the government bank Indian Overseas Bank has also increased the Margin Cost of Funds Based Lending Rate i.e. MCLR. According to exchange filing, the government bank will increase MCLR by 0.05 to 0.10 percent. The bank said that MCLR rates will increase from Monday.
What is MCLR?
MCLR is the rate below which the bank cannot issue a loan. It is mandatory for banks to issue their MCLR. MCLR: This is the minimum rate below which no bank can give loans to the customers, that is, below this rate banks cannot give loans to the customers. Increase in MCLR means that loans related to marginal cost will become expensive. Due to this people have to pay more EMI. Increase in MCLR means that the interest rates on loans related to marginal cost like home loan, vehicle loan will increase, but keep in mind that when the MCLR rate increases, the interest rates on the loan do not increase immediately. The EMI of the loan borrowers progresses only on the reset date.