Banks Raise MCLR

Axis Bank raised its marginal cost of funds-based lending rates (MCLRs) by 10-15 basis points (bps). Its one-year MCLR increased by 10 bps to 8.5 per cent. IDBI Bank also revised its MCLR by 5-10 bps across various tenors while Syndicate Bank and Allahabad Bank raised their one-year MCLR by 5 bps to 8.5 per cent and 8.3 per cent, respectively. Big players such as SBI, PNB, HDFC Bank and ICICI Bank had earlier upped their lending rates. As a result, both new borrowers and existing ones paying floating rates will have to shell out more. Lending rates are going up as banks have raised their deposit rates. Other factors include rising oil prices, large government borrowing targets, tight liquidity condition, higher inflation expectation and interest rate hike by the US Federal Reserve.