Business: State-owned Punjab National Bank on Thursday raised funds-based lending rate (MCLR) by 0.05 per cent or 5 basis points across all tenors, making most consumer loans costlier. The benchmark one-year term MCLR, which is used to price most consumer loans such as auto and personal, will be 8.90 per cent against the earlier rate of 8.85 per cent, PNB said in a regulatory filing. The three-year MCLR is 9.20 per cent, up 5 basis points. Among others, rates for one-month, three-month and six-month tenures will be in the range of 8.35-8.55 per cent. The MCLR on overnight tenure will be 8.30 per cent against 8.25 per cent.
The new rates will be effective from August 1, 2024. On Wednesday, another public sector lender Lender Bank of India also announced a hike in MCLR by 5 basis points to 8.95 per cent for a period of one year. However, there was no change in rates for the remaining period. MCLR In short, MCLR is a key factor in determining the cost of borrowing for individuals and businesses in India. MCLR is essentially the minimum interest rate that a bank can charge on a loan. This rate is determined by considering the bank’s cost of funds, operating costs and a certain profit margin.
