Loan interest rate hiked by Indian Overseas Bank and Bank of Baroda

Loan interest rate hiked by Indian Overseas Bank and Bank of Baroda.

The Indian Overseas Bank in their regulatory meeting released about the increase of marginal cost of funds-based lending rate (MCLR) by 10 basis point. The two and three-year MCLRs have been hiked by a similar margin to 7.80 percent each.

The overnight MCLR will cost 7.05 per cent, while for one month the same will be 7.15 percent. The three and six-month MCLRs are up at 7.70 percent each.” The revised MCLRs has come into effect from September 10, 2022." This move will make consumer loans costlier.

In the Financial Year 2022, the bank reported a 20. 1 per cent rise in net profit to Rs, 392 crore despite a 2.5 per cent decline in total income to Rs. 5, 028.20 crore in the first quarter of FY 2023 over first quarter of Financial Year 2022.

The Government of India helds 96.38 per cent in 30 June 2022 with the Indian Overseas Bank, which is one of the 12 public sector banks (PSB). This is followed by institutional investors, public and others.

Simultaneously, the Bank of Baroda has also decided to increase its MCLR by 0.10 percent that will come into effect from September 12, 2022.

The Bank of Baroda said in a regulatory filing said that Bank of Baroda’s one year MCLR will be priced at 7.80 per cent against 7.70 per cent.

The six-month MCLR will be up at 7.65 percent from 7.55 percent while three-month MCLR will be at 7.50 percent compared to 7.45 percent.

It may be mentioned that many banks have raised their lending rates following at 140 basis points hike in repo rate by the Reserve Bank of India (RB) so far this financial year. Meanwhile the central bank is expected to hike interest rates further to tame high inflation.

As per the Reserve Bank of India’s norms banks are required to review their lending rates every month on the marginal cost of funds.

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