You are here: Home » Opinion » Letters
Business Standard

Letters: Fuzzy matter

Banks are not reducing their marginal cost of funds-based lending rate

Business Standard 

With reference to Debashis Basu’s article, “Home loans loot: Whose side is on” (August 21), I would like to add that it is not just that banks are not reducing their marginal cost of funds-based lending rate (MCLR) or passing on the benefit for loans. I experienced a strange case of one of the foreign banks (HSBC) increasing the immediately after the first three months, and that too by 25 basis points.
This is a quarterly reset based on MCLR, but in the last quarter, I cannot understand if the cost of funds for the bank or in the general economy has gone up. To my mind it is stable or a declining bias. Even then, immediately after the first three months (the loan was sanctioned in May), the bank is increasing the I think they are probably changing the spread for home loans with for new customers, otherwise, they would lose the market share.

To my questions, I haven’t got any answers. I don’t know if there is an option to complain to the (RBI) about these practices. Even if I complain, will the be bothered about the fact that banks are not just refusing to reduce interest rates, but are also conveniently increasing the rates too?
Somy Thomas  via email
can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201  ·  E-mail:
All must have a postal address and telephone number

First Published: Tue, August 22 2017. 22:34 IST