Indian Overseas Bank (IOB) and Bank of Maharashtra (BoM) have hiked the Marginal Cost of Funds Based Lending Rate (MCLR) by 5-25 basis points across tenors, reflecting the state-owned lenders’ rise in cost of funds.
Chennai-based IOB, in a filing with BSE, said its revised MCLR for one-year tenor will be 8.05 per cent, up from 7.90 per cent previous rate. The new rates will be effective from November 10, 2022.
It hiked rates in six tenors starting with 15- day (fortnight) tenor (10 bps) to three years (25 Bps). It kept MCLR for three-month tenor unchanged at 7.85 per cent.
IOB’s cost of deposits rose sequentially from 4.04 per cent in April-June 2022 quarter (Q1Fy23) to 4.11 per cent in quarter ended September (Q2Fy23). Its Yield on advances rose from 7.34 per cent in Q1Fy23 to 7.83 per cent in Q2Fy23.
According to Reserve Bank of India’s data, the one-year median MCLR of scheduled commercial banks has increased from 7.75 per cent in September 2022 to 7.90 per cent in October 2022. Lenders have passed on part of the increase in cost of funds to borrowers amid tight liquidity conditions, bankers said.
BoM, which is based in Pune, hiked the MCLR by 10 basis points to 7.90 per cent. It kept rates unchanged in four buckets starting with a fortnight to six-month tenor for which it offers MCLR based loans. Its costs of deposits rose sequentially from 3.46 per cent in Q1Fy23 to 3.54 per cent in Q2Fy23. Its yield on advances rose from 7.43 per cent in Q1Fy23 to 7.81 per cent in Q2Fy23, according to a filing with BSE.