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MCLR | Base Rate | PLR

MCLR Rates: Full Form, Meaning

Last Updated 18th Oct 2021

  • MCLR stands for Marginal Cost of Fund based Lending Rate.
  • MCLR rate is the internal benchmark rate used by banks to fix the interest rate on floating rate loans.
  • Starting from 1st April 2016, all banks in India are required to benchmark and price their loans to MCLR. However with effect from April 1, 2019, all floating rates on retail loans are to be linked to external benchmark rates.
Bank Name Benchmark Type Current Rate
SBI MCLR 7.45%
HDFC PLR 16.05%
Bank of Baroda MCLR 8.15%
ICICI Bank MCLR 8.85%
Axis Bank MCLR 9.15%
LIC Housing Finance PLR 14.70%
Apply for Home Loan @ 6.50% *

Current MCLR, Base Rate, PLR Trend of All Banks in India Oct 2021

Bank MCLR, Past Trend Current MCLR/ PLR Rate – 18th Oct 2021 Base Rate Latest Update
SBI MCLR Base Rate 6.65% - 7.30% 7.45% 15th Jul 21
HDFC PLR 16.05% - 04th Mar 21
ICICI Bank MCLR Base Rate 7.00% - 7.25% 8.85% 01st Oct 21
Axis Bank MCLR Base Rate 7.15% - 7.50% 9.15% 18th Aug 21
PNB Housing Finance PLR 14.35% - 16th Apr 18
ICICI Home Finance PLR 17.70% - 03rd Apr 20
LIC Housing Finance PLR 14.70% - 01st Jan 20
Bank of Baroda MCLR Base Rate 6.55% - 7.35% 8.15% 12th Sep 21
Citibank MCLR Base Rate 5.50% - 6.00% 5.55% 07th Sep 21
Indiabulls PLR 24.00% - 01st Oct 18
HDFC Bank MCLR Base Rate 6.85% - 7.40% 9.30% 07th Oct 21
IndusInd Bank MCLR Base Rate 8.00% - 8.90% 9.90% 22nd Sep 21
Kotak Bank MCLR Base Rate 6.60% - 7.85% 7.40% 16th Sep 21
Yes Bank MCLR Base Rate 6.20% - 8.45% 8.50% 01st Oct 21
RBL Bank MCLR Base Rate 7.65% - 8.30% 10.05% 22nd Sep 21
ESAF Small Finance Bank MCLR Base Rate 13.18% - 13.64% - 17th Sep 21
Jana Small Finance Bank MCLR Base Rate 9.90% - 11.43% - 08th Oct 21
Cholamandalam PLR 15.00% - 14th Mar 19
Piramal Housing Finance PLR 16.05% - 05th May 19
IDFC First Bank MCLR Base Rate 7.85% - 8.30% 9.50% 08th Oct 21
DBS Bank MCLR Base Rate 6.35% - 6.80% 6.75% 07th Oct 21
Bajaj Finserv PLR 20.16% - 01st May 14
United Bank of India MCLR Base Rate 6.65% - 7.60% 9.55% 01st Aug 21
Union Bank of India MCLR Base Rate 6.55% - 7.25% 8.40% 11th Sep 21
UCO Bank MCLR Base Rate 6.70% - 7.30% 9.60% 10th Sep 21
Jammu And Kashmir Bank MCLR Base Rate 6.50% - 7.75% 8.50% 10th Oct 21
Bandhan Bank MCLR Base Rate 8.78% - 10.82% 12.00% 31st Aug 21
Punjab and Sind Bank MCLR Base Rate 6.90% - 7.45% 9.70% 16th Sep 21
Central Bank of India MCLR Base Rate 6.55% - 7.10% 8.70% 10th Oct 21
Canara Bank MCLR Base Rate 6.55% - 7.25% 9.40% 07th Oct 21
Bank of Maharashtra MCLR Base Rate 6.70% - 7.25% 9.40% 08th Oct 21
Bank of India MCLR Base Rate 6.60% - 7.70% 8.80% 01st Oct 21
LT Housing Finance PLR 17.50% - 26th Apr 18
Andhra Bank MCLR Base Rate 6.60% - 7.25% 8.35% 11th May 21
Indian Overseas Bank MCLR Base Rate 6.85% - 7.45% 9.45% 11th Oct 21
HSBC Bank MCLR Base Rate 6.75% - 7.05% 7.50% 01st Oct 21
Standard Chartered Bank MCLR Base Rate 5.85% - 7.65% 7.60% 07th Oct 21
Edelweiss PLR 17.50% - 30th Nov 15
GIC Housing Finance PLR 15.00% - 01st Nov 17
IIFL PLR 17.50% - 01st Apr 14
Corporation Bank MCLR Base Rate 6.60% - 7.25% 8.40% 11th May 21
IDBI Bank MCLR Base Rate 7.00% - 8.60% 9.65% 12th Oct 21
Indian Bank MCLR Base Rate 6.95% - 7.35% 8.30% 03rd Oct 21
Allahabad Bank MCLR Base Rate 6.95% - 7.35% 8.30% 03rd Oct 21
OBC MCLR Base Rate 6.65% - 7.60% 8.50% 01st Aug 21
PNB MCLR Base Rate 6.60% - 7.55% 8.50% 01st Oct 21
Karur Vysya Bank MCLR Base Rate 7.40% - 8.15% 10.10% 07th Oct 21
Syndicate Bank MCLR Base Rate 6.55% - 7.25% 9.50% 07th Oct 21
DCB Bank MCLR Base Rate 8.02% - 8.97% 10.64% 06th Oct 21
Dhan Laxmi Bank MCLR Base Rate 7.30% - 8.70% 9.80% 01st Oct 21
Karnataka Bank MCLR Base Rate 8.05% - 8.80% 8.70% 01st Aug 21
South Indian Bank MCLR Base Rate 7.85% - 8.20% 9.75% 20th Sep 21
Federal Bank MCLR Base Rate 7.85% - 8.10% 9.63% 07th Sep 21
Lakshmi Vilas Bank MCLR Base Rate 9.20% - 9.75% 10.15% 01st Sep 21
Equitas Small Finance Bank MCLR Base Rate 12.25% - 13.15% - 01st Oct 21
AU Small Finance Bank MCLR Base Rate 8.30% - 10.50% - 07th Oct 21
Ujjivan Small Finance Bank MCLR Base Rate 12.90% - 14.50% - 20th Sep 21

What is MCLR?

MCLR is a lending rate calculated based on cost of raising new funds for the bank which include the cost of maintaining CRR/SLR, operating costs of banks and tenor premium. As MCLR is closely linked to repo rate, it improves the transmission of RBI’s repo rate cut to the end borrower. Banks publish MCLR for at least five durations which are overnight MCLR, 1 month MCLR, 3 month MCLR, 6 month MCLR and 1 year MCLR. However banks may publish MCLR base rates for more than five periods.In general, lenders revise the MCLR rate every month. Interest rate on each floating rate loan is reset based on the duration of the MCLR to which it is linked.

What is Base Rate?

Base Rate is the lending rate calculated based on the total cost of funds of the banks and is the minimum interest rate at which a bank can lend except for loans to its own employees, its retired employees and against bank’s own deposits. All floating and fixed rate loans sanctioned by banks before 1st April, 2016 were priced using base rate as benchmark. If you check the MCLR and base rate of banks shown above, you will notice that MCLR rates are mostly 5 - 50 bps lower compared to base rate. The reason is that MCLR is based on the cost of raising new funds and hence, any changes in repo rates results in changes in cost of borrowings of banks which gets transmitted to MCLR. Starting from April 2018, RBI has mandated that banks’ base rates be linked to MCLR rates. This is expected to benefit home loans and loans against property borrowers whose loans are linked to base rate. Any increase or decrease in MCLR rates will now automatically be applicable to pre 2016 loans that are benchmarked to base rate.

What is PLR?

PLR stands for Prime Lending Rate. It is the internal benchmark rate used for setting up the interest rate on floating rate loans sanctioned by Non Banking Financial Companies (NBFC) and Housing Finance Companies (HFC). PLR rate is calculated based on average cost of funds.NBFC and HFC generally price their loan at discount on their existing PLR.

Which Loans are Linked to MCLR Rate?

Floating rate loans are linked to MCLR rate with effect from April 1st, 2016. Typically, home loans and loans against property schemes are floating rate loans and benchmarked to MCLR rates. Some banks offer fixed rate home loan and property loan under special schemes. Personal loan, business loan, car loan and gold loan are mostly fixed rate loans and are independent of MCLR rates.

Type of Loan Type of Rates Interest Rate
Home Loan
Floating – MCLR Linked 6.50%
Loan Against Property
Floating – MCLR Linked 6.90%
Personal Loan
Fixed Rate 10.25%
Business Loan
Fixed Rate 14.00%
Gold Loan
Fixed Rate 9.00%
Car Loan
Fixed Rate 8.65%

Current Rates

How does MCLR Rate Works?

Floating rate on your home loan is a function of two parameters; the reset frequency of the interest rate on your loan and spread on the benchmark. These two parameters together will determine the interest rate you will pay on your home loan, mortgage loan or business loan throughout the loan tenure:

  • Reset Frequency: The applicable MCLR rate will be the rate corresponding to the interest rate reset frequency of the loan. So, a home loan with a reset frequency of every one year will be priced with the 1 year MCLR as the benchmark and a home loan with a 3 month reset will be priced with the 3 month MCLR as the benchmark
  • Spread: The next component is spread or the margin that you pay over the bank‘s MCLR for a particular loan type of the bank. The margin would be fixed at time of sanction and can be changed only if there is a significant change in customers’ credit profile. For instance, Bank A has 1 year MCLR of 9.1% and spread of 0.2% for home loan. The interest rate that you will be charged in this case would be 9.3%.
  • When a bank changes its MCLR, interest rate on your floating rate home loan will change accordingly. Banks typically adjust the change in floating rates, by changing the loan tenure and by keeping the EMI constant.
  • For instance, if you have taken home loan rate at floating rate of 9% and after a year, your bank decides to lower down the MCLR by 50 bps. Hence, your home loan floating rate associated with MCLR rate will also come down to 50 bps at a rate of 8.50%. In most of the cases, the cut in home loan rate might not result in lower EMI, but your loan tenure will stand reduced.

What is the Difference Between MCLR and Base Rate?

The difference between MCLR and Base rate is majorly due to factors on which these are calculated. Base rate of a bank is calculated based on the following factors -

  • Average cost of funds
  • Operating expenses
  • Minimum rate of return i.e. profit
  • Negative carry (loss in interest income) of keeping CRR/SLR

MCLR is calculated on the following factors-

  • Marginal or incremental cost of funds which includes cost of raising new borrowings/deposits and minimum rate of return(profit)
  • Negative carry on account of CRR
  • Operating costs
  • Calculated tenor wise based on cost of raising new funds for different tenors

Why are MCLR Loans More Transparent as Compared to Base Rate Loans?

The above comparison shows that MCLR rate is more transparent and customer friendly as compared to base rate:

  • MCLR is calculated based on the cost of raising new funds and also allows to have differential rates based on the underlying tenure of new funds.
  • Cost of raising new funds for banks is closely linked to Repo Rate which makes MCLR rate more responsive to any changes in policy repo rates as compared to base rates.
  • Further, MCLR of banks is revised every month as compared to base rate which is revised every quarter which makes MCLR more dynamic as compared to base rate.

08th Oct 2021 – RBI keeps Repo Rate unchanged at 4.00%

In its fourth bi-monthly monetary policy for the financial year 2021-22, RBI has kept the repo rate unchanged to 4.00%. This has been done to limit the damage to the economy caused by the second wave of Covid-19. Repo rate is the rate at which the central bank infuses liquidity in the banking system. The reverse repo rate also stands unchanged at 3.35%.

FAQs

What is the meaning of MCLR?

MCLR is the abbreviated term for Marginal Cost of Fund based Lending. MCLR is a benchmark rate used by banks to lend loans. The rate is determined based on factors such as CRR/SLR, operating costs of banks, and repo rate and is an important factor of loan interest rates.

Is the MCLR rate the same for all banks?

No, the MCLR rate is not the same for all banks. Indeed, each bank has a different MCLR that varies along with tenors such as Overnight MCLR, 1-month MCLR, 3-month MCLR, 6-month MCLR and 1-year MCLR.

What is the difference between the base rate and MCLR?

The difference between MCLR and the base rate is precisely due to the factors considered in determining the two. While MCLR is based on factors like incremental cost, which includes the cost of raising new borrowings/deposits and the minimum rate of return(profit), negative carry on account of CRR and operating costs. The base rate is based on factors such as average costs of funds, operating expenses, profit returns, and negative carryforwards, such as loss in interest income. Also, while the base rate remains the same for all tenures, MCLR varies as per the loan tenure.

What is the SBI MCLR Rate?

State Bank of India revised the MCLR rate each month for all tenures. Currently, SBI MCLR rate for one year tenure is 7.00%. The SBI MCLR rate for other tenures ranges between 6.65% to 7.00%.

What is the current Mclr rate of ICICI?

Currently, ICICI Bank MCLR rate ranges between 7.00% to 7.25% for overnight, one month, three months, six months and one year.


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Our News - Oct 2021
  • 2021-10-13 : IDBI Bank Revises MCLR Rates
    IDBI Bank has revised MCLR rates for different tenures. Overnight MCLR , 1 month and 3 month MCLR rate is 7.00%, 7.05% & 7.10% respectively. The MCLR rate for 1 year is 7.65%.
  • 2021-10-08 : Jana Small Finance Bank Revises MCLR Rates
    Jana Small Finance has revised MCLR rates for overnight to 9.94%. The bank has also revised the one-month MCLR and three months MCLR to 9.90% and 9.91%, respectively.
  • 2021-10-07 : Karur Vysya Bank Revises MCLR Rates
    Karur Vysya Bank has revised MCLR rates for overnight to 7.40%. The bank has also revised the one-month MCLR from 7.65% to 7.55%.
  • 2021-09-15 : SBI Revises Base Rate to 7.45%
    The largest public sector of the country, the State Bank of India, has revised its base rate to 7.45% p.a with effect from September 15. Earlier, the base rate was 7.40%
  • 2021-09-14 : DCB Bank Revises MCLR Rate
    DCB Bank has revised the Marginal Cost of Funds Lending Rate (MCLR) for different tenures. Now, the one-year and six-month MCLR are 9.02%. Three-months MCLR is at 8.77%, one month and overnight MCLR is 8.07%.
*Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. Read More
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