Punjab National Bank Hikes Lending Rate By 0.15%, EMIs To Rise

State-owned Punjab National Bank (PNB) on Wednesday raised its marginal cost of funds-based lending rate by 15 basis points or 0.15 per cent across all tenures, a move that will lead to an increase in easy monthly instalments (EMIs) for borrowers.

The new rates are effective from June 1, PNB said in a regulatory filing.

The revision follows an off-cycle rate increase by the Reserve Bank of India (RBI) in May. The central bank hiked the repo rate - at which it lends short-term money to banks - by 0.40 per cent to 4.40 per cent.

With the revision, one-year MCLR or marginal cost of funds based lending rate has increased to 7.40 per cent from 7.25 per cent earlier.

Most of the loans are linked to the one-year MCLR rate.

MCLR is the lowest interest rate that a bank or lender can offer.

The overnight, one-month and three-month MCLR rose by 15 basis points to 6.75 per cent, 6.80 per cent and 6.90 per cent, respectively, whereas the six-month MCLR increased to 7.10 per cent.

At the same time, three-year MCLR increased by 0.15 per cent to 7.70 per cent.

With the increase, EMIs will go up for those borrowers who have availed loans on MCLR.