Bank of Baroda news today: Several public sector banks, including Bank of Baroda Ltd. and Canara Bank Ltd., have raised their marginal cost of funds-based lending rates by up to 10 basis points, despite the Reserve Bank of India maintaining the policy rate on Thursday.
Public Sector Banks Raise Lending Rates: Impact on EMIs and Consumer Loans Explained
This adjustment will lead to an increase in Equated Monthly Installments (EMIs) tied to the MCLR. The one-year MCLR, which serves as the benchmark for many consumer loans, has been revised upward. Bank of Baroda stated in a regulatory filing that the one-year MCLR will now stand at 8.70%, up from the previous rate of 8.65%, with this change taking effect from August 12.
Similarly, Canara Bank has also elevated its one-year MCLR by 5 basis points to 8.70%, effective from August 12. Another public sector bank, Bank of Maharashtra, has taken an even larger step, raising its MCLR by 10 basis points. As a result, the one-year MCLR for the Bank of Maharashtra will increase to 8.60% from the previous 8.50%, with this modification becoming effective from August 10.
Bank of Baroda Raises Lending Rates Leading to Higher EMIs Despite RBI’s Unchanged Repo Rate
The decision by the Bank of Baroda to hike their lending rates will render loans more costly and result in higher EMIs. Despite the Reserve Bank of India maintaining the repo rate at 6.50% during its recent monetary policy review, these banks have independently chosen to raise their MCLR rates. This action will directly impact the monthly repayment amounts for loans tied to the MCLR benchmark, causing them to rise. Bank of Baroda announced that these revised rates will come into effect on August 1.
Monetary Policy Committee Holds Repo Rate Steady at 6.50%, Ready to Act as Needed, Says Governor Shaktikanta Das
Governor Shaktikanta Das announced on Thursday, following the Monetary Policy Committee (MPC) meeting, that the committee’s decision is to maintain the policy repo rate at 6.50%.
Governor Shaktikanta Das underscored their preparedness to respond promptly to changing circumstances. Additionally, he drew attention to the ongoing monetary transmission process and the persistence of headline inflation above the 4% target. In light of these factors, the MPC’s primary focus is on gradually withdrawing accommodation measures. This strategic approach aims to facilitate a steady convergence of inflation towards the target while simultaneously nurturing economic growth.