Bank Loan Rates Hiked: After SBI and Canara Bank, now this bank has also increased MCLR, check details!

Kotak Mahindra Bank has increased its Marginal Cost of Lending Rate (MCLR) by 5 basis points. The move has come as a blow to the bank's customers, who will now have to pay higher EMIs on their loans. The new rates have come into effect from 16 March 2023.

Kotak Mahindra Bank's MCLR for different tenors has increased as follows: Overnight loan MCLR increased to 8.25%, 1-month MCLR to 8.50%, 3 months MCLR to 8.65% and for 1 year, 2 years, and 3 years it is 9.05% respectively percent, has increased to 9.10 percent and 9.25 percent.

This hike in lending rates by Kotak Mahindra Bank follows similar moves by other banks. For example, India's largest public sector bank State Bank of India (SBI) increased its base rate and benchmark prime lending rate (BPLR) with effect from March 1, 2023. SBI increased its BPLR by 0.70 percent or 70 basis points from 14.15 per cent to 14.85 per cent. The bank has decided to increase its Base Rate and BPLR on a quarterly basis.

Similarly, another public sector bank Canara Bank increased its MCLR with effect from March 12, 2023. The bank increased its overnight MLCR by 35 basis points to 7.90 percent. The 1-month MLCR increased by 45 basis points to 8.00 percent, while the 6-month MLCR increased by 10 basis points to 8.40 percent. 

Additionally, the 3-month MLCR increased by 25 basis points to 8.15 percent, and the 1-year MLCR increased by 10 basis points to 8.60 percent.

The recent increase in lending rates by Kotak Mahindra Bank, SBI, and Canara Bank will result in their customers paying higher EMIs to service their loans. It remains to be seen whether other banks will follow suit in raising their lending rates, and how this will affect India's economy in the coming months.