Mumbai: Indian Bank has announced an increase in some of its benchmark lending rates following a review by its Asset Liability Management Committee (ALCO). The revised rates will come into effect from June 3.
The bank has raised key MCLR tenures by 10 basis points, a move that could make certain loans linked to these benchmarks slightly more expensive for borrowers.
MCLR Rates Increased Across Key Tenures
Under the Marginal Cost of Funds-Based Lending Rate (MCLR) framework, Indian Bank has increased the rates for three-month, six-month and one-year tenures.
The three-month MCLR has been raised to 8.50 percent from 8.40 percent. The six-month MCLR has been increased to 8.75 percent from 8.65 percent, while the one-year MCLR now stands at 8.85 percent, compared with 8.75 percent earlier.
However, the overnight MCLR remains unchanged at 7.90 percent, and the one-month MCLR continues at 8.20 percent.
The one-year MCLR is particularly important because many retail loans, including home loans and personal loans, are linked to this benchmark.
Treasury Bill Linked Rates Also Raised
Indian Bank has also revised its Treasury Bill Linked Benchmark Lending Rates (TBLR) upward across all tenures.
The rate for loans with a tenure of up to three months has been increased to 5.35 percent from 5.25 percent.
For loans between three and six months, the TBLR has been raised to 5.55 percent from 5.45 percent.
Meanwhile, rates for six months to one year and one year to three years have been increased to 5.75 percent from 5.60 percent.
These changes indicate a broader tightening in the bank’s lending benchmarks.
Other Benchmark Rates Remain Unchanged
While MCLR and TBLR rates have been revised, Indian Bank has kept several other important rates unchanged.
The Base Rate remains at 9.55 percent, while the Benchmark Prime Lending Rate (BPLR) continues at 13.80 percent.
The Policy Repo Rate remains at 5.25 percent, and the Repo Benchmark Linked Lending Rate (RBLR) stays unchanged at 7.95 percent.
Indian Bank Shares End Lower
Shares of Indian Bank ended lower on Monday despite the rate revision announcement.
The stock closed at Rs 809.50 on the BSE, down Rs 28.50 or 3.40 percent from the previous close. Investors will now watch whether the revised lending rates help support the bank’s interest income in the coming quarters.
