Private lender Kotak Mahindra Bank on Thursday announced a hike in Marginal Cost of Funds based Lending Rate (K-MCLR) by 5 basis points (bps) across tenures. The new rates come in effect from February 16, 2023. As per the website, the overnight MCLR has been revised to 8.20 percent. For one month, it has been hiked to 8.45 percent. For three months, the bank has revised the MCLR to 8.60 percent.

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Here are the revised MCLR rates of Kotak Mahindra Bank:

For six months, the new MCLR is 8.80 percent. For one year it has been hiked to 9.00 percent, while for two years and three years it has been raised to 9.05 percent and 9.20 percent respectively.

The base rate for Kotak Mahindra Bank Ltd is 7.65 percent, and the 'Benchmark PLR' is 16.40 percent, the bank said.

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The Marginal cost of funds-based lending rate or MCLR is the basic minimum rate at which a bank can give consumers loans. For the basis of determining the interest rates of different types of loans, the Reserve Bank of India (RBI) has established MCLR back in 2016.

Earlier in January, Kotak Mahindra had hiked the MCLR for several loan sectors across tenures by 10 to 30 basis points (bps), effective from January 16, 2023.

Why are banks raising rates?

Recently, several commercial banks have been raising their lending rates. This decision comes in the wake of Reserve Bank of India (RBI) increasing benchmark policy rates.

Since May, the RBI has increased the repo rate by 250 basis points to 6.50 percent. The first hike was to the tune of 40 bps in May and then 50 basis points in June. It again raised the repo rate by 50 bps in August and then again by 50 bps in September. Considering another hike of 35 bps in December and

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(Edited by : Anshul)