Bank Of Baroda Hikes MCLR By 10 Bps

Bank of Baroda has upped its marginal cost of funds based lending rate (MCLR) by 10 basis points across all tenors. Following the revision, which is effective April 7, the benchmark one-year MCLR will be 8.40 per cent against 8.30 per cent now.

The increase in MCLR comes in the backdrop of liquidity slightly tightening in the banking system. According to the Reserve Bank of India, it had injected Rs 6,000 crore and Rs 21,300 crore on a net daily average basis in February and March, respectively.

All rupee loans sanctioned and credit limits renewed with effect from April 1, 2016 are priced with reference to the MCLR. This rate is the internal benchmark for pricing loans for banks.

MCLR comprises of marginal cost of funds, negative carry on account of cash reserve ratio, operating costs and tenor premium. Last month, State Bank of India, the country’s largest bank, had increased its one-year MCLR from 7.95 per cent to 8.15 per cent.