Despite RBI status quo on interest rates, BoB raises MCLR — borrowers' loan EMI burden set to rise

Bank of Baroda (BANKBARODA) — India's second largest PSU lender after SBI — on Tuesday hiked its MCLR or marginal cost of funds-based lending rate for select tenors by five basis points, effective April 12. The hike in the key interest rate by Bank of Baroda comes days after the RBI announced a status quo on the repo rate though not committing to the end of hikes in the current cycle of monetary policy tightening.

Bank of Baroda revised the MCLR applicable to select maturities with effect from Wednesday. | Image: Reuters

Bank of Baroda (BANKBARODA) — India's second largest PSU lender after SBI — on Tuesday hiked its MCLR or marginal cost of funds-based lending rate for one year by five basis points, effective April 12. MCLR is the key interest rate below which a bank cannot lend money.

The hike in the MCLR by Bank of Baroda comes days after the RBI announced a status quo on the repo rate — the key interest rate at which it lends money to commercial banks — as well as policy stance, but did not premise the end to the current cycle of monetary policy tightening. Read more on RBI's April 6 policy review

Bank of Baroda MCLR rate hike: What will be the new interest rate?

From Wednesday, April 12, Bank of Baroda's one-year MCLR will be 8.6 per cent, instead of the current 8.55 per cent, according to a regulatory filing.

Bank of Baroda interest rates

Bank of Baroda also raised its overnight MCLR by five basis points, while leaving the interest rates applicable to other tenors unchanged.

Here's the list of latest Bank of Baroda interest rates, as laid out by the state-run lender:

MCLR tenor	Existing MCLR (%)	MCLR with effect from April 12, 2023 (%)
Overnight	7.9	7.95
One month	8.2	8.2
Three months	8.3	8.3
Six months	8.4	8.4
One year	8.55	8.6
Source: Bank of Baroda