Chennai-headquartered Indian Overseas Bank has decided to up its benchmark marginal cost of funds based lending rates (MCLR) across tenors by 5-10 basis points with effect from June 10.
The MCLR hike follows the Reserve Bank of India increasing its policy repo rate by 25 basis points from 6 per cent to 6.25 per cent on June 6. One basis point equals one-hundredth of a percentage point.
IOB's one-year MCLR will be 8.60 per cent against 8.50 per cent now. Overnight and one month MCLR's have been upped by 5 basis points each to 8 per cent and 8.10 per cent, respectively.
The revised MCLR of the public sector bank in various tenors are: three months (8.30 per cent); six months (8.40 per cent); two years (8.70 per cent), and three years (8.80 per cent).
As per RBI guidelines, all floating rate rupee loans sanctioned and credit limits renewed with effect from April 1, 2016 are priced with reference to the MCLR. Banks review and publish the internal benchmark MCLRs on a monthly basis.