Axis Bank has raised its Marginal Cost of Funds based Lending Rates (MCLR) by ten basis points across the three and six month, one, two and three year categories with one-year MCLR now standing at 8.4 per cent.
The bank followed other private lenders like HDFC Bank and IndusInd Bank in increasing MCLR — indicating a trend.
IndusInd Bank has also raised its MCLR by 15 basis points, bringing its one-year MCLR to 9.10 per cent. The new rates were applicable from 17th February 2018. Earlier this month, HDFC Bank hiked its MCLR by 10 basis points.
This is the second time during the past two months that Axis Bank has hiked its MCLR. Earlier in January, the bank had hiked its MCLR by 5 basis points.
As hardening of bond yields leads to a rise in the cost of funds for banks, the lending rates indicate that banks have started to transfer this rise in cost to their borrowers.
However, Bank of Baroda cuts its MCLR by 10-25 basis points for tenors less than one year. The past month has also seen other public sector banks like State Bank of India and Andhra Bank lowering their MCLR.