The bank’s one year MCLR was 8.75 percent which now stands reduced to 8.55 percent, a drop of 20 basis points.
After the hike, the latest overnight MCLR is now at 7.80% whereas it’s one month, three month and six month MCLR rates are 8.05 percent, 8.20 percent and 8.40 percent, respectively. And the one year, two year and three year rates are at 8.55 percent, 8.85 percent and 9.05 percent, respectively.
According to the Kotak Mahindra Bank website, “Base Rate of Kotak Mahindra Bank Ltd with effect from Nov 16, 2022 is 7.40 percent. The ‘Benchmark PLR’ of Kotak Mahindra Bank Ltd with effect from Nov 16, 2022 is 16.15 percent.”
What is MCLR
According to the Kotak Mahindra Bank website, “The Marginal Cost Lending rate is the minimum rate below which banks cannot lend. It is an internal rate fixed by individual banks for floating loans. The MCLR is linked to the marginal cost of funds, operating costs, cost of carrying in cash reserve ratio and tenure premium. It is determined based on the current cost of funds as opposed to the base rate which is based on the average cost of funds. MCLR is also more responsive to changes in policy rates. However, there was still a lack of transparency in the home loan interest rates for customers.”
SBI also increased the benchmark one-year tenor MCLR from 7.95 percent to 8.05 percent with effect from November 15, 2022.