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Bank of Baroda hikes MCLR by 10-15 bps with effect from 12 Nov, EMIs to go up

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One of the largest public sector lenders, Bank of Baroda has raised its Marginal Cost of Funds Based Lending Rate (MCLR) in the range of 10 basis points to 15 basis points. The new MCLR rates will come into effect from November 12. Since May this year, banks including both in the public and private sectors have been increasing their lending and deposit rates due to the repo rate hike cycle.

As per the regulatory filing, the bank’s 1-year MCLR will rise to 8.05% with effect from November 12 — up by 10 basis points — from 7.95% currently. Also, its six-month MCLR has been increased by 10 basis points to 7.90% from the currently levied 7.80%.

Similarly, the three-month and one-month MCLR has also witnessed a 10 basis points hike each. With effect from November 12, the three-month MCLR will be at 7.75% from the currently imposed 7.65%, while the one-month MCLR will be at 7.70% from the current 7.60%.

The highest hike of 15 basis points is made in overnight MCLR to 7.25% from the current 7.10%.

With the hike in MCLR, interest rates on home loans, personal loans, auto loans, education loans, and others will also witness a similar change from November 12. That being said, EMIs will go up.

At present, the bank has levied an 8.45% to 9.80% interest rate on home loans for non-staff borrowers. While for staff members, the home loan rate is at 8.45%.

Meanwhile, currently, the bank’s interest rate ranges from 10.20% to 17.55% on personal loans. Government employees receive lower rates compared to private sector employees.

On BSE, BoB shares closed at 165.45 apiece down by 0.51%. The bank’s market cap is around 85,560.19 crore.

In Q2FY23, the bank garnered a standalone net profit of 3,312.42 crore rising by 58.70% yoy, while net interest income jumped by 34.47% yoy to 10,174.46 crore. The bank registered a rise of 13.6% yoy to 10,90,172 crore in deposits globally. Gross NPA was at 5.31% in Q2FY23 — dropping sharply from 8.11% in Q2FY22 and 6.26% in Q1FY23.

During the second quarter, the bank recorded global advances jumped by over 19% yoy to 8,73,496 crore. Under advances, in Q2FY23, the bank’s organic retail loan portfolio grew by 28.4% led by growth in personal loan portfolio by 172.8%, auto loan by 29.2%, education loan by 23.2%, home loan by 19% on a year-on-year basis. Additionally, its agriculture loan portfolio climbed by 14.1% yoy. While the total gold loan portfolio saw 27.8% yoy growth.

To tame multi-years high inflation, RBI has hiked the policy repo rate by a huge 190 basis points or 1.9% between May to September policy. Now the repo rate stands at 5.90%.

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