Banks have started increasing interest rates even before the three-day meeting of the RBI’s Monetary Policy Committee to review interest rates is over. The country’s largest private bank HDFC Bank along with Canara Bank and Karur Vysya Bank have increased interest rates. HDFC Bank and Canara Bank have increased the Marginal Cost of Lending Rate (MCLR) by 0.35 per cent and 0.05 per cent. At the same time, Karur Vysya Bank has increased the benchmark prime lending rates (BPLR) by 0.40 percent.
What is MCLR and BPRL?
MCLR is called Marginal Cost of Lending Rate. It acts as a benchmark for banks or in simple language, no one can give loan at a rate lower than the MCLR rate fixed by him. MCLR is directly related to the loan, when it is increased by a bank, the EMI increases while when it is reduced, it is the opposite.
BPLR is called the Benchmark Prime Lending Rate, it is also almost similar to MCLR. The BPLR is applicable to those who were paid prior to the introduction of Base Rate. Let us tell you, from July 1, 2010, the base rate system was implemented by replacing the BPLR system.
Canara Bank has increased the MCLR rate for 6-month loans from 7.30 percent to 7.35 percent, while the interest rate on one-year loans has been increased from 7.35 to 7.40 percent. At the same time, Karur Vysya Bank has increased the BPLR rate by 0.4 percent to 13.75 percent.
RBI’s Monetary Policy Committee meeting has started on Monday (7-June-2022) to review interest rates in the country, the results of which will be announced on Wednesday. Experts believe that due to inflation, the RBI may once again increase the interest rates in the country.