Indian Overseas Bank hikes MCLR by 15-35 bps, RLLR revised too; EMIs may rise

MCLR rates:

As per the regulatory filing, the 1-year MCLR is hiked by 20 basis points to 8.25% from the current 8.05%. While the 2-year MCLR will rise by 25 basis points to 8.35% from the present 8.10%. The 3-year MCLR rate will increase by 30 basis points to 8.40% from the current 8.10% with effect from December 10.

For short-term tenures, the MCLR will increase by 20 basis points to 8.15% on six-month tenure from the present print of 7.95%, while the rate will be 8% on three-months tenure from the current 7.85%, rising by 15 basis points. As for the 1-month tenure, the MCLR will rise by 20 basis points to 7.70% from the present 7.50%.

Meanwhile, IOB has hiked overnight MCLR rate highest by 35 basis points to 7.65% from the present 7.30%.

RLLR:

IOB on Wednesday said, the bank has revised the RLI-R lo 9.107. (i.e. 6.25% + 2.85% = 9.10%) with effect from December 10.

After the 35 bps repo rate hike, PSU bank stocks witnessed a significant upside including IOB shares. On BSE, IOB stock closed at ₹24.05 apiece up by 4.57%. The stock had reached near its 52-week high of ₹24.85 apiece. Currently, IOB’s market cap is over ₹45,460 crore.

In December policy, RBI softened its rate hike size to 35 basis points — taking the repo rate to 6.25%. So far in FY23, the repo rate has been increased by 225 basis points. Consequently, the standing deposit facility (SDF) rate stands adjusted to 6%, and the marginal standing facility (MSF) rate and the Bank Rate to 6.50%.

MPC remained focused on the withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth.