Big Blow: Taking Loan from Bank of Baroda gets expensive, MCLR increases by 0.05 percent

Amidst the recent exponential rise in Inflation, there is another blow for the general public. On Monday, the public sector Bank of Baroda (BoB) gave a big blow to its customers after it increased its MCLR by 0.05 percent. After this, taking a loan from the bank will become expensive effective from Tuesday. In the information given by the bank to the stock market, it has been told that it has decided to increase the interest rate. The increase in rates will be implemented from 12 April 2022.

In a statement issued by the bank, it has been said that it has increased the marginal cost of funds-based lending rates (MCLR) by 0.05 percent. Under this, it has been decided to increase the MCLR to 7.35 percent for a period of one year. After the recent increase by the State-owned banks, personal loans, auto loans, and home loans can become expensive. Notably, the Reserve Bank in its monetary policy last week kept the repo rate unchanged, that is at 4%. The RBI plans to prioritize inflation over growth as of now based on the current scenario.

The MCLR is a reference rate or internal benchmark for the financial institution. The marginal cost of funds-based lending rate defines the process used to determine the minimum home loan rate of interest. The MCLR method was introduced into the Indian financial system by the Reserve Bank of India in the year 2016.