Public Sector Banks Are Hiking Loan Interest Rates In September

To curb rising inflation, the repo rate has been increased recently by the Reserve Bank of India. Its effect started showing in the market in the month of September. Public sector banks have increased the interest rate on their loans. The first impact of this has been on home, auto and personal loan borrowers. 

Canara Bank on Tuesday has increased the benchmark marginal cost of funds based lending rate (MLCR) by up to 0.15 per cent. This will make the loan costlier. The new rate announced by the bank will be effective from Wednesday. MLCR has been increased by 0.10 per cent in one night by the bank. Canara Bank has increased its three-month maturity bucket by 0.15 per cent. With this increase of the bank, the maturity bucket has reached 7.25 per cent.

After increasing the repo rate of the Reserve Bank by the banks, the interest rate on the home loan has been increased by up to one per cent. Explain that the repo rate is the rate at which the central bank gives loans to other banks. When the bank takes a costly loan from the Reserve Bank, it will definitely give a costly loan to the customers. Its effect is being seen in the market.