Bank of Baroda, Canara Bank, Bank of Maharashtra are set to hike lending rates by up to 10 base-points,

Several public sector banks, including Bank of Baroda (BoB) and Canara Bank, have raised their marginal cost of funds-based lending rates (MCLR) by up to 10 basis points. This decision comes even as the RBI chose to maintain the policy rate on Thursday.

This increase will lead to higher EMIs for loans tied to MCLR. The one-year MCLR is the benchmark rate for most consumer loans.

According to a regulatory filing by BoB, the revised one-year MCLR will be 8.70 per cent, up from the previous rate of 8.65 per cent. This change will be effective from August 12th.

Similarly, Canara Bank has also raised its MCLR by 5 basis points to 8.70 per cent, starting from August 12th.

Bank of Maharashtra (BoM), another public sector lender, has gone a step further by raising its MCLR by 10 basis points. This shift will push the one-year MCLR to 8.60 per cent, as compared to the earlier 8.50 per cent. The new rate took effect from August 10, 2023.

In the recent MPC meeting, the Monetary Policy Committee (MPC) decided to maintain the policy repo rate at 6.50 per cent. Reserve Bank of India Governor Shaktikanta Das, speaking after the meeting, mentioned that while monetary transmission is still ongoing and headline inflation remains above the 4 per cent target, the MPC's focus remains on gradually withdrawing accommodation to bring inflation in line with the target while also supporting economic growth.

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