Punjab National Bank (PNB) raised all six Marginal Cost of Funds Based Lending Rate (MCLR) benchmarks by 10 basis points from Nov. 1, potentially lifting costs for borrowers when their loans reset under contract.
An Oct. 31 filing to the stock exchanges lists the revised rates. The overnight rate is 8.10%, while the three-year benchmark is 9.20%.
| MCLR tenor | Rate effective Oct. 1 | Rate effective Nov. 1 |
|---|---|---|
| Overnight | 8.00% | 8.10% |
| One month | 8.25% | 8.35% |
| Three months | 8.50% | 8.60% |
| Six months | 8.65% | 8.75% |
| One year | 8.80% | 8.90% |
| Three years | 9.10% | 9.20% |
PNB kept its repo-linked lending rate at 8.35%, including a 0.35% benchmark spread, and its base rate at 9.50%, the filing said.
The Reserve Bank of India (RBI) reported that the median one-year MCLR for scheduled commercial banks was 8.55% in October, down from 8.61% in September.
PNB describes MCLR as an internal reference used to set rates according to customer risk. RBI directions say lenders add a spread to the benchmark to determine the actual loan rate. RBI rules also require external benchmarks for floating-rate retail and personal borrowing, as well as floating-rate loans to micro, small and medium enterprises.
For floating-rate loans that remain tied to MCLR, the borrower's contract sets the reset schedule, and RBI limits the interval between resets to one year. Existing MCLR-linked loans may continue until repayment or renewal. Borrowers whose loans are tied to a revised benchmark may face a higher rate at their next contractual reset, but the filing gives no estimate of how many customers will be affected or how installments may change.
PNB says it reviews MCLR monthly; the filing did not give a date for the next review.
