breaking news Bank Of Baroda Raises Mclr By 5bps, Home Loan Issuance Will Rise

The state-owned Bank of Baroda (BoB) on Thursday announced an increase in its marginal cost of funds-based lending rate (MCLR) by 5 basis points (bps) across maturities. The revised MCLR came into effect on February 12, 2023.

Following the latest rate hike, the MCLR fell from 7.85% to 7.90% overnight. The MCLR for one month was increased from 8.15% to 8.20% while the MCLR for a three-month term was increased from 8.25% to 8.30%, after revision.

The MCLR for a six-month term was raised from 8.35% to 8.40%. The MCLR for a one-year term has increased from 8.50% to 8.55%.

It comes after the Reserve Bank of India (RBI) hiked borrowing costs by 25 basis points while leaving the door open for further hikes as core inflation remained elevated. The decision to raise the rate will make loans – including home and auto – and business credit expensive.

The RBI’s six-member monetary policy committee voted 4-2 to raise the benchmark repurchase or repo rate to 6.50% and retain its stance of withdrawing accommodation, which was adopted at the start of last year.

This is the sixth consecutive increase in interest rates since May last year, and the cumulative rise now totals 250 basis points. The RBI raised interest rates by 35 basis points in December 2022. Rates were raised by 40 basis points in May and 50 basis points each in June, August and September.