SBI, HDFC, PNB and Other Banks Increase MCLR Rates: How Much More Will Borrowers Pay?
Several major banks in India have revised their Marginal Cost of Funds-Based Lending Rates (MCLR), following the Reserve Bank of India’s repo rate hike. Both public and private sector lenders, including State Bank of India (SBI), HDFC Bank, Punjab National Bank (PNB) and Bank of Baroda, have increased their lending rates.
These revisions could make borrowing more expensive for customers with loans linked to MCLR. Here is a look at which banks have changed their rates and when the revised rates came into effect.
Which Banks Have Increased Their MCLR Rates?State Bank of India was among the first lenders to revise its MCLR. The bank increased rates by 15 basis points, or 0.15 percentage points, across the 3-month, 6-month, 1-year, 2-year and 3-year tenures. The revised rates became effective on October 15.
Punjab National Bank subsequently raised its MCLR by 10 basis points across tenures ranging from overnight to three years.
Bank of India also announced a 10-basis-point increase for its 3-month, 6-month, 1-year and 3-year tenures. The revised rates at both PNB and Bank of India took effect on November 1.
HDFC Bank increased its MCLR by 5 to 15 basis points across all seven tenures, with the new rates coming into effect on November 7.
Canara Bank raised its MCLR by 10 basis points across all tenures. Meanwhile, Bank of Baroda increased rates by 5 to 20 basis points for the 1-month, 3-month, 6-month and 1-year tenures. Its revised rates became effective on November 12.
What Is MCLR and How Does It Affect Loan EMIs?MCLR stands for Marginal Cost of Funds-Based Lending Rate. It is the minimum lending rate used by banks to determine the interest rates on certain loans.
When a bank increases its MCLR, borrowers with loans linked to this benchmark may face higher interest costs when their rates are revised. This can result in increased EMIs or a longer loan repayment period, depending on the loan terms.
Why Have Banks Increased Their Lending Rates?The recent changes in bank lending rates follow the Reserve Bank of India’s decision to increase the repo rate.
In October, the RBI’s Monetary Policy Committee (MPC) announced a 25-basis-point hike, taking the repo rate to 5.50%.
Before this increase, the central bank had reduced the repo rate by a total of 125 basis points between February 2025 and December 2025. However, the latest policy decision marked a shift towards higher rates.
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