Indian Overseas Bank MCLR Hike: Since the increase in the repo rate of the Reserve Bank (RBI Repo Rate Hike), the burden of EMI on the people has increased. Since this decision, many public sector banks and private sector banks have decided to increase their interest rates. Now the name of another bank has been added to this list. This bank is Indian Overseas Bank. The bank has decided to increase its MCLR rates i.e. Marginal Cost of Funds Based Lending Rates. This will have a direct impact on the interest rates offered by the bank. This new MCLR rates have been implemented from today i.e. from July 10, 2022.
Bank is offering this much MCLR rate
Indian Overseas Bank is offering MCLR rates between 6.95 percent to 7.55 percent to its customers. Earlier the maximum MCLR rate was 7.45 percent which has now been increased to 7.55 percent. These rates are for one year. At the same time, the MCLR rate for 1 day to 6 months ranges from 6.95-7.50 percent. The direct impact of this increase will be on the interest rates of auto loans, personal loans, home loans, etc. At the same time, the MCLR rate has been reduced to 7.55 percent for two years. An increase of 0.10 percent has also been registered in this.
RLLR rate also increased
Along with this, Indian Overseas Bank has also increased the RLLR rate i.e. Repo Linked Lending Rate. Now the new repo linked lending rate of the bank is 7.75 percent. These new rates will also be applicable from today itself.
Why loan becomes costlier due to increase in MCLR?
Any bank fixes its interest rates on the basis of marginal cost of funds based lending rate. The EMI of the customers is fixed only when the MCLR increases and decreases. Banks change their MCLR rates only after the change in the Reserve Bank’s Repo Rate. If the bank’s MCLR is high, then customers will have to pay a higher interest rate and if the MCLR is lower, EMI will have to be paid on the basis of a lower interest rate.