ICICI Bank revises MCLR: check new loan rates

ICICI Bank has revised its Marginal Cost of Fund-Based Lending Rates (MCLR)—the minimum lending rate below which a bank is not permitted to lend—which will be effective today, June 1, 2023.

ICICI Bank’s MCLR for overnight and one-month tenures is revised to 8.35 per cent. For the three-month period, the bank has fixed the MCLR at 8.4 per cent. For the six-month period, the MCLR is 8.75 per cent, and for one year the MCLR is 8.85 per cent.

The MCLR is revised every month, taking into consideration the repo rate and other rates related to borrowing.

The MCLR is the benchmark lending rate used by domestic banks to establish interest rates on a variety of loans, including house loans, personal loans, and business loans. Each bank determines the MCLR based on its marginal cost of funds, which includes elements such as borrowing costs, operational expenses, and the targeted profit margin.

The Reserve Bank of India (RBI) launched the MCLR, a transparent approach for establishing lending rates, in April 2016 to replace the base rate scheme. It is determined by variables such as the repo rate, the bank's operating costs, and the tenure premium.
 
How does MCLR revision impact customers?

MCLR is applied to home loans, auto loans, and personal loans. If the MCLR is hiked, the EMI (equated monthly installments) on loans gets costlier, and if it is lower, various loans get cheaper.

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