The RBI increased the repo rate by 25 basis points (bps) earlier this month, making it the highest since 2018. From May 2022, there has been a sixth straight increase. Due to this, some banks have increased their lending interest rates, increasing the cost of loans for borrowers.
Repo is the rate at which the RBI loans money to commercial banks. The Marginal Cost of Funds Based Lending Rate and the Revised Repo Based Lending Rate are two banks that have raised their lending interest rates (RBLR).
Below are the banks that have raised their lending interest rates:
1. SBI:
State Bank of India, or SBI, the largest lender in the nation, has increased the MCLR by 10 basis points across tenures, increasing the cost of borrowing for most consumer loans like auto or home loans. The revised tariffs became effective on February 15.
2. Kotak Mahindra Bank:
Kotak Mahindra Bank has raised all its lending rates by 5 basis points in response to the RBI's rate hike. As a result, customers' loans will cost more due to the change.
3. Bank of Baroda:
The public sector lender has approved the increase in MCLR by 5 bps across all tenors. The revised prices went into effect on February 12, 2023.
4. Axis Bank:
Axis Bank, a private lender, increased the MCLR across all tenors by 10 bps. The new prices became effective on February 19, 2023.
5. RBL Bank:
The private lender has increased its lending rates across tenures based on the marginal cost of funds by 20 bps. The revised MCLR rates started to apply on February 22, 2023. As a result, term loans connected to MCLR will likely see an increase in interest rates due to a rise in MCLR rates.