Kotak Mahindra Bank has increased its marginal cost of funds-based rates (MCLR) across tenors. However, the private lender has cut its one-year MCLR by 25 basis points.
As a result of this, most borrowers at Kotak Mahindra Bank would see their loan EMI go up even though EMI would reduce for home loan borrowers—home loans are typically linked with a bank’s one-year MCLR rate.
As against 8.75% interest, the bank would now charge 8.50% interest from home loan borrowers. For other tenors like overnight MCLR to 3-year MCLR, rates have been increased by 10 basis point in the range of 78% to 9.5%. Â The MCLR for shorter durations is in the range of 7.80-8.40% while it is 8.85% and 9.05%, respectively, for two- and three-year MCLRs. The revised rates have come into effect from November 16, 2022.
Recall here that the bank has raised the MCLR by 90 basis points since June, following the 190-basis point repo rate hike by the Reserve bank of India (RBI)— as on November 17, 2022, the repo rate stands at 5.90%.
Also recall that all banks in India offer home loans linked with external lending benchmarks like the repo rate since October 2019. Housing loans sanctioned before October 1, 2019, were linked to MCLR, an internal lending benchmark which objectionable transparency.
