Indian Overseas Bank, Bank Of Baroda Rising Lending Interest Rates

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By CNBCTV18.com STI (Update)

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The equivalent monthly installments (EMI) of these banks will be expensive for those who benefit from loans compared to the MCLR.

Indian Overseas Bank raised the marginal cost of funds-based lending rate (MCLR) by 10 basis points.

“The two- and three-year MCLRs have been increased by a similar margin at 7.80% each. Among other things, the overnight MCLR will cost 7.05%, while one month at 7.15%. Three- and six-month MCLRs are up at 7.70 percent each. The revised MCLRs will come into effect from September 10, 2022,” Indian Overseas Bank said in a regulatory filing.

This decision will make consumer loans more expensive.

The bank reported a 20.1% rise in net profit to Rs 392.18 crore despite a 2.5% drop in total revenue to Rs 5,028.20 crore in the first quarter of the fiscal year. 23 compared to the first quarter of fiscal 22.

Indian Overseas Bank is one of 12 Public Sector Banks (PSBs) in which the Government of India owned 96.38%, as of June 30, 2022. Next come institutional, public and other investors.
Meanwhile, Bank of Baroda has also decided to increase its MCLR by 0.10% which will come into effect on September 12, 2022.

“Bank of Baroda’s one-year MCLR will be priced at 7.80% from 7.70%,” the bank said in a regulatory filing.

The six-month MCLR will be up to 7.65% from 7.55% while the three-month MCLR will be at 7.50% from 7.45%.

Many banks have raised their lending rates following a 140 basis point hike in the repo rate by the Reserve Bank of India (RBI) so far this fiscal year. The central bank should raise interest rates further to control high inflation.

Reserve Bank of India standards require banks to revise their lending rates every month based on the marginal cost of funds.

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