Bank of Baroda revised its marginal cost of funds based lending rates (MCLR) on Tuesday.
The new rates will be effective from June 7, Thursday.
"The bank's 1-year MCLR will be 8.45 per cent, which is competitive as per the current market scenario," the bank said in a stock market filing.
The overnight tenor MCLR (lending rates) has been raised from 7.9 per cent to 7.95 per cent.
Similarly, the one month tenor MCLR (lending rates) has been raised from 7.95 per cent to 8 per cent.
The three-month MCLR (lending rates) has been raised from 8.05 per cent to 8.1 percent.
The six month tenor MCLR has been raised from 8.25 per cent to 8.3 per cent.
The one year MCLR has been raised from 8.4 per cent to 8.45 per cent.MCLR tenorExistingMCLR w.e.f June 7Overnight7.97.95one month7.958three months8.058.1six months8.258.3one year8.48.45MCLR is the minimum rate below which commercial banks cannot lend to its customers.
The Reserve Bank of India (RBI), in April 2016 unveiled the concept of MCLR, which sought to remove much of the discretion commercial banks have to set lending rates.With effect from June 1, country's largest lender State Bank of India (SBI) raised its marginal cost of funds based lending rates (MCLR) by 10 basis points across the tenors.SBI's lending ratesTenorExisting MCLR (In %)Revised MCLR (In %)Over night7.807.90One Month7.807.90Three Month7.857.95Six Month8.008.10One Year8.158.25Two Years8.258.35Three Years8.358.45The last time ICICI Bank, State Bank of India and Punjab National Bank raised their lending rates (MCLR) was in the month of March 2018.
During that time, the rate hike took place a day after SBI raised its fixed deposit (FD) interest rates.Following the SBI, Punjab National Bank (PNB), ICICI Bank, HDFC Ltd and Kotak Mahindra Bank also raised their lending rates (MCLRs), thus adding to the EMI (equated monthly instalments) burden of borrowers.