One of the leading private sector bankers, Axis Bank has hiked its marginal cost of funds-based lending rates (MCLR) by 30 basis points across tenures. With that, term loans linked to MCLR are likely to see their interest rates go up. Hence, EMIs may also rise further. The new MCLR rates have come into effect from December 17, 2022.
As per the notice, 1-year MCLR is now 8.75% from the previous 8.45%, while 2-years and 3-years MCLR is now 8.85% and 8.90% compared to the earlier rates of 8.55% and 8.60% respectively.
Meanwhile, the six-month MCLR has climbed to 8.70% from the previous 8.40%, and the three-month MCLR has also been raised to 8.65% from the earlier 8.35%. One-month and overnight MCLR is at 8.55% each compared to the previous 8.25% each.
Also, the bank stated that “these rates will be valid till the next review.”
On the other hand, the base rate remained at 9.15% which has been since September 17, 2022.
It needs to be noted that base rate and MCLR are reviewed by the bank from time to time and they may or may not change.
However, not all borrowers will face the MCLR hike on their loan repayment, as Axis Bank has adopted the repo rate as the external Benchmark lending rate with effect from October 01, 2019, as part of RBI’s circular. Simply put, all new floating rate loans and credit limits renewed with effect from October 01, 2019, will be linked to the repo rate.
On Monday, at around 12.42 pm, Axis Bank stock was trading at ₹942.90 apiece up by 0.83% on BSE. The stock was near the day’s high of ₹944 apiece. Its market cap is over ₹2,89,776 crore. Notably, Axis Bank was moving closer to its 52-week high of ₹950 apiece.
Banks have been revising their benchmark lending rates such as MCLR, repo-linked lending rate, and external benchmark lending rate more frequently in the current fiscal tracking RBI’s repo rate hike trends due to inflationary pressures. So far in FY23, the central bank has hiked the policy repo rate by 225 basis points taking the key rate to its highest level since August 2018 at 6.25%.