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- PLR/MCLR Rate
MCLR | Base Rate | PLR
MCLR Rates: Full Form, Meaning
- 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 | 7.40% |
| 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% |
Current MCLR, Base Rate, PLR Trend of All Banks in India May 2021
| Bank MCLR, Past Trend | Current MCLR/ PLR Rate – 11th May 2021 | Base Rate | Latest Update |
|---|---|---|---|
| SBI MCLR Base Rate | 6.65% - 7.30% | 7.40% | 10th Mar 21 |
| HDFC PLR | 16.05% | - | 04th Mar 21 |
| ICICI Bank MCLR Base Rate | 7.05% - 7.30% | 8.85% | 01st Apr 21 |
| Axis Bank MCLR Base Rate | 7.20% - 7.55% | 9.15% | 17th Apr 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% - 7.40% | 8.15% | 12th Apr 21 |
| Citibank MCLR Base Rate | 5.65% - 6.10% | 5.45% | 07th Apr 21 |
| Indiabulls PLR | 24.00% | - | 01st Oct 18 |
| HDFC Bank MCLR Base Rate | 6.85% - 7.40% | 9.30% | 07th Apr 21 |
| IndusInd Bank MCLR Base Rate | 8.20% - 8.95% | 10.20% | 22nd Apr 21 |
| Kotak Bank MCLR Base Rate | 6.75% - 7.90% | 7.40% | 16th Apr 21 |
| Yes Bank MCLR Base Rate | 6.20% - 8.45% | 9.00% | 01st Apr 21 |
| RBL Bank MCLR Base Rate | 7.65% - 8.40% | 10.05% | 22nd Apr 21 |
| ESAF Small Finance Bank MCLR Base Rate | 13.66% - 14.36% | - | 17th Apr 21 |
| Jana Small Finance Bank MCLR Base Rate | 9.90% - 11.80% | - | 08th Apr 21 |
| Cholamandalam PLR | 15.00% | - | 14th Mar 19 |
| Piramal Housing Finance PLR | 16.05% | - | 05th May 19 |
| IDFC First Bank MCLR Base Rate | 8.10% - 8.45% | 9.50% | 08th Apr 21 |
| DBS Bank MCLR Base Rate | 6.25% - 6.65% | 7.00% | 07th Apr 21 |
| Bajaj Finserv PLR | 20.16% | - | 01st May 14 |
| United Bank of India MCLR Base Rate | 6.65% - 7.60% | 9.55% | 01st Apr 21 |
| Union Bank of India MCLR Base Rate | 6.60% - 7.25% | 8.35% | 11th Mar 21 |
| UCO Bank MCLR Base Rate | 6.70% - 7.30% | 9.60% | 10th Feb 21 |
| Jammu And Kashmir Bank MCLR Base Rate | 6.60% - 7.85% | 9.50% | 10th Apr 21 |
| Bandhan Bank MCLR Base Rate | 7.00% - 7.60% | 12.00% | 16th Apr 21 |
| Punjab and Sind Bank MCLR Base Rate | 7.15% - 7.65% | 9.70% | 16th Feb 21 |
| Central Bank of India MCLR Base Rate | 6.55% - 7.10% | 8.70% | 10th Apr 21 |
| Canara Bank MCLR Base Rate | 6.70% - 7.35% | 9.40% | 07th Feb 21 |
| Bank of Maharashtra MCLR Base Rate | 6.80% - 7.30% | 9.40% | 07th Feb 21 |
| Bank of India MCLR Base Rate | 6.70% - 7.80% | 8.80% | 01st Feb 21 |
| LT Housing Finance PLR | 17.50% | - | 26th Apr 18 |
| Andhra Bank MCLR Base Rate | 6.60% - 7.40% | 8.35% | 11th Feb 21 |
| Indian Overseas Bank MCLR Base Rate | 6.85% - 7.45% | 9.45% | 10th Nov 20 |
| HSBC Bank MCLR Base Rate | 7.00% - 7.30% | 7.90% | 01st Feb 21 |
| Standard Chartered Bank MCLR Base Rate | 6.25% - 7.55% | 7.60% | 08th Feb 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% - 7.40% | 9.65% | 11th Feb 21 |
| IDBI Bank MCLR Base Rate | 7.05% - 8.60% | 9.65% | 12th Feb 21 |
| Indian Bank MCLR Base Rate | 7.05% - 7.30% | 8.30% | 03rd Feb 21 |
| Allahabad Bank MCLR Base Rate | 7.05% - 7.30% | 8.30% | 03rd Feb 21 |
| OBC MCLR Base Rate | 6.65% - 7.60% | 9.50% | 01st Apr 21 |
| PNB MCLR Base Rate | 6.65% - 7.60% | 8.65% | 01st Apr 21 |
| Karur Vysya Bank MCLR Base Rate | 7.90% - 8.65% | 10.10% | 07th Sep 20 |
| Syndicate Bank MCLR Base Rate | 6.70% - 7.35% | 9.50% | 07th Feb 21 |
| DCB Bank MCLR Base Rate | 8.18% - 9.43% | 10.64% | 06th Feb 21 |
| Dhan Laxmi Bank MCLR Base Rate | 7.80% - 8.90% | 10.00% | 01st Feb 21 |
| Karnataka Bank MCLR Base Rate | 8.20% - 8.95% | 8.70% | 01st Feb 21 |
| South Indian Bank MCLR Base Rate | 7.90% - 8.20% | 9.75% | 20th Feb 21 |
| Federal Bank MCLR Base Rate | 7.65% - 7.90% | 9.63% | 16th Jan 21 |
| Lakshmi Vilas Bank MCLR Base Rate | 9.35% - 9.75% | 10.15% | 10th Feb 21 |
| Equitas Small Finance Bank MCLR Base Rate | 11.85% - 12.50% | - | 01st Feb 21 |
| AU Small Finance Bank MCLR Base Rate | 7.60% - 10.20% | - | 07th Feb 21 |
| Ujjivan Small Finance Bank MCLR Base Rate | 13.00% - 14.90% | - | 01st Apr 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 | 6.65% |
| Loan Against Property | Floating – MCLR Linked | 7.20% |
| Personal Loan | Fixed Rate | 10.25% |
| Business Loan | Fixed Rate | 13.50% |
| Gold Loan | Fixed Rate | 9.50% |
| Car Loan | Fixed Rate | 8.70% |
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.
07th Apr 2021 – RBI keeps Repo Rate unchanged at 4.00%
In its first 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 7.05% to 7.30% for overnight, one month, three months, six months and one year.
- 2021-05-10 : Revised Marginal cost of lending rates for ICICI Bank
ICICI Bank revised its MCLR, with effect from 1 May 2021. The overnight and one-month MCLR is 7.05%. The rate for three months, six months and one year are 7.10%, 7.25% and 7.30%, respectively. - 2021-05-10 : Revised Marginal cost of lending rate for Bank of India
Bank of India revised its MCLR rates with effect from 1 May 2021. The MCLR rates for overnight and one month are 6.70% and 7.20%. The rate for short tenors of three months and six months is 7.25% and 7.30%. Further, the MCLR for long tenors of one year and three years is 7.35% and 7.80%. - 2021-04-26 : Revised MCLR for IndusInd
With effect from 22 April 2021, IndusInd Bank revised its MCLR. The overnight, one-month and three months rate is 8.20%, 8.25% and 8.30%, respectively. The six months MCLR is 8.50%. MCLR for long tenors of 1 year is 8.60%, for two years it is 8.90%, and for three years it is 8.95%. - 2021-04-26 : RBL Bank revised its Marginal cost of lending rates
RBL Bank revised its MCLR. The overnight MCLR is 7.65%. The rate for one month and three months is 7.75% and 7.85%, respectively. Further, the MCLR for six months and one year is 8.05% and 8.40%, respectively. The revised rates are effective from 22 April 2021. - 2021-04-22 : Revised MCLR of Axis Bank
With effect from 18 April 2021, Axis Bank revised its MCLR. The overnight and one- month MCLR is 7.20%. The MCLR for three months, six months and one year is 7.30%, 7.35% and 7.40%, respectively. The MCLR rate for long tenors of two years and three years is 7.50% and 7.55%.
