Axis Bank increases MCLR rates by 5 basis points: All you need to know

New Delhi: Axis Bank has announced a rise in the marginal cost of funds based lending rate, following SBI, Kotak Mahindra, and Bank of Baroda (MCLR). According to the Axis Bank website, MCLR rates have been hiked by 5 basis points across all tenors. The revised prices has come into effect from April 18, 2022.

The one-year benchmark tenor MCLR will increase to 7.40%, while the two-year and three-year tenor MCLRs will increase to 7.50% and 7.55%, respectively. The overnight, one-month, three-month, and six-month MCLRs have all been raised by 0.05 percent to 7.20, 7.30, and 7.35 percent, respectively.

MCLRs with effect from April 18 2022:

Tenor MCLR %

Overnight 7.20%

One month 7.20%

Three months 7.30%

Six months 7.35%

One year 7.40%

Two years 7.50%

Three years 7.55%

Borrowers' interest payments will normally grow as the MCLR rises. Existing borrowers' EMIs will be affected by the MCLR rise when their loan reset dates arrive.

With effect from April 15, SBI boosted its MCLR by 10 basis points across all tenors. 

From April 16, Kotak Mahindra Bank boosted its one-year MCLR by 5 basis points to 7.4 percent. With effect from April 12, Bank of Baroda upped its MCLR by 5 basis points.

The minimum lending rate (MCLR) is the rate at which a bank is not permitted to lend. The MCLR system superseded the previous base rate mechanism in determining commercial bank lending rates. On April 1, 2016, the RBI implemented the MCLR to set lending interest rates.