Following State Bank of India (SBI) and Punjab National Bank (PNB), which raised their lending rates on Thursday, ICICI Bank also raised its marginal cost of funds based lending rates (MCLR) with effect from March 1, 2018. The marginal cost of funds based lending rate of ICICI Bank is now 7.95% for the overnight rate against the earlier 7.8%, a hike of 15 basis points.
The marginal cost of funds based lending rate (MCLR) refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI. It is an internal benchmark or reference rate for the bank.
The one month marginal lending cost of ICICI Bank is now 7.95% against the earlier rate of 7.8%, a hike of just 15 basis points
Similarly, ICICI Bank's three month MCLR has risen to 8% from the 7.85%, a rise of 15 basis points. The six month MCLR has been raised from 8.15% to 8.25%, a rise of 10 basis points.
The one year MCLR rose by 10 basis points from 8.2% to 8.30% with effect from March 1, 2018.
On Thursday, SBI raised the one-year MCLR or benchmark rate since the inception of a new lending rate system in April 2016. The rate revision from SBI comes just a day after the bank raised interest rates on fixed deposits across maturities.
Another state-run bank PNB also raised its lending rate, effective March 1, 2018. PNB raised its one-year MCLR rate by 15 basis points to 8.30 per cent from 8.15 per cent.
Many banks have been increasing their deposit and lending rates since the last quarter. While lending rates have been jacked up on an average of 5-10 bps by private sector lenders like HDFC Bank, Axis Bank, Kotak Mahindra Bank and Yes Bank since January, almost all the state-run lenders have been increasing their bulk deposit rates in the range of 15 bps to 125 bps.