Axis Bank hikes MCLR by 25 bps, joining other lenders in policy action

Central bank's MPC has cumulatively increased the repo rate by 190 bps since May

Axis Bank has increased its marginal cost of funds-based lending rate (MCLR) by 25 basis points (bps) with effect from October 18. Accordingly, the bank’s overnight to three-year MCLR now ranges from 8.15 per cent to 8.50 per cent.

The increase in lending rate by the country’s third largest private sector bank comes after the central bank’s six-member rate-setting body--monetary policy committee (MPC)—raised the benchmark repo rate by 50 bps in its September meeting, taking the repo rate to 5.90 per cent.

It was the third consecutive 50 bps hike delivered by the MPC and cumulatively the repo rate has been increased by 190 bps since May.

State Bank of India, the country's largest lender, last week raised its MCLR by 50 bps from October 15. Consequently, its overnight to three years’ MCLR now ranges between 7.60 per cent and 8.25 per cent.

Private lender Kotak Mahindra Bank increased its MCLR for various tenors with effect from October 16. Its overnight to three-year MCLR ranges between 7.70 per cent and 8.95 per cent.

Kochi-based Federal Bank has revised its one-year MCLR to 8.70 per cent.

Punjab National Bank, ICICI Bank, Yes Bank, HDFC Bank, Bank of Baroda are among the lenders which have already raised their MCLR rates following RBI rate action.