ICICI Bank and Punjab National Bank Hike MCLR Rates Amid Rising Inflation

Strategic Insights -

The ICICI Bank and the Punjab National Bank, two major lenders in India, have increased their Marginal Cost of Lending Rate (MCLR) by 5 basis points in response to rising inflation, effective from September 1, 2023. This move is expected to impact millions of customers who have plans to secure car loans, education loans, personal loans, or home loans, as it directly influences loan interest rates. The hike in MCLR rates will result in higher Equated Monthly Installments (EMIs) for customers.

Key Takeaways:

  • ICICI Bank increased its MCLR by 5 basis points, with the overnight MCLR rising from 8.40% to 8.45%, one-month MCLR to 8.50%, three-month MCLR to 8.85%, and one-year MCLR to 8.95%.
  • Punjab National Bank also increased its MCLR by 5 basis points, with the overnight MCLR surging from 8.10% to 8.15%, one-month MCLR climbing from 8.20% to 8.25%, and three-month MCLR increasing from 8.30% to 8.35%.
  • The MCLR serves as a fixed lending rate that banks use to determine the interest rates for car loans, home loans, education loans, and more.
  • Changes in MCLR rates directly affect the interest rates and EMIs for customers, resulting in increased EMI burdens for higher MCLR rates.
  • ICICI Bank has over 600 million customers, and Punjab National Bank has over 220 million customers, making the impact of the MCLR hike significant.

Statistics:

  • ICICI Bank's overnight MCLR increased from 8.40% to 8.45% (an increase of 5 basis points).
  • Punjab National Bank's overnight MCLR surged from 8.10% to 8.15% (an increase of 5 basis points).
  • ICICI Bank's one-month MCLR rose to 8.50%, three-month MCLR to 8.85%, and one-year MCLR to 8.95%.
  • Punjab National Bank's one-month MCLR climbed to 8.25% and three-month MCLR increased to 8.35%.

Sources:

  • DNA (Daily News & Analysis) - "ICICI Bank, Punjab National Bank increase MCLR by 5 basis points"