Axis Bank Hikes MCLR; Home Loan, Car Loan EMIs to Increase Soon; Know Details Here

Axis Bank MCLR Rate Hike: India’s leading private sector lender Axis Bank has hiked its marginal cost of lending rate (MCLR), the lender has said in a notification last week. The marginal cost of lending rate, or MCLR, which is a key point in deciding various loan rates, has been hiked by 5 basis points, Axis Bank has said in its notification. The new rates have already become effective, as per the notification. Here, it must be noted that one basis point equals to one-hundredth part of a percentage point. This means that loan interests will increase with the Axis Bank MCLR Hike. 

The new Axis Bank MCLR rates have become effective from August 18. With the latest rise in MCLR rates, the overnight and one-month MCLR rate of Axis Bank now stand at 7.85 per cent. It was 7.80 per cent before this. The MCLR for three months, has been hiked to 7.95 per cent from 7.90 per cent, while for six months Axis Bank MCLR rate has been increased from 7.95 per cent to 8.00 per cent. Similarly, MCLR for one year has been raised to 8.05 per cent from 8.00 per cent. MCLR for two years has jumped to 8.15 per cent from 8.10 per cent. The key lending rate for three-year tenure has been climbed to 8.20 per cent from 8.15 per cent.

Here are the tenor-wise MCLR effective from August 18, 2022, as per the Axis Bank website:

Over night: Old rate — 7.80 per cent; New rate —  7.85 per cent

One Month: Old rate — 7.80 per cent; New rate — 7.85 per cent

Three Month: Old rate — 7.90 per cent; New rate — 7.95 per cent

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Six Month: Old rate — 7.95 per cent; New rate 8.00 per cent

One Year: Old rate — 8.00 per cent; New rate 8.05 per cent

Two Years: Old rate — 8.10 per cent; New rate 8.15 per cent

Three Years: Old rate — 8.15 per cent; New rate 8.25 per cent

The Axis Bank MCLR rate hike comes two weeks after the Reserve Bank of India hiked its repo rate by 50 basis points in its bi monthly MPC meeting in early August. This was done to manage the rising inflation in the country. After the increase in the repo rates, leading private and public sector banks joined in to hike their MCLR.

MCLR or marginal cost of lending rate is a benchmark interest rate, which is the minimum rate of interest banks are allowed to give out loans to its customers. This rate limit is set in stone for borrowers unless specified otherwise by the Reserve Bank of India. With the increase in the MCLR, Axis Bank home and other loan borrowers may not be happy as the interests are most likely to go up. The MCLR will continue to surge further as the hike in the repo rate has pushed the cost of the funds for banks.

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