Base Rate

Current Base Rate of All Banks

Last Updated 10th Dec 2016
7th Dec 2016 - RBI keeps interest rates unchanged. Repo rate stays at 6.25%. CRR at 4%. 100% CRR on fresh deposits withdrawn
  • MCLR (Marginal Cost of Fund based Lending Rate) is the internal benchmark rate for banks used for benchmarking floating rate loans effective from 1st April 2016
  • MCLR is based on cost of funds for banks and is derived as sum of marginal cost of funds, negative carry on account of CRR, operating costs of banks and tenor premium
  • As MCLR is closely linked to repo rate, it will improve 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. The banks may revise the MCLR rate every month.
  • Interest rate on each floating rate loan would be reset on based on the duration of the MCLR to which it is linked

Base Rate Trend, PLR Trend of All Banks In India

Bank MCLR, Past Trend Current MCLR Rate – 10th Dec 2016 Base Rate Latest Update
SBI MCLR Base Rate 8.65% - 9.05% 9.30% 01st Dec 16
HDFC PLR - 16.30% 05th Oct 15
ICICI Bank MCLR Base Rate 8.70% - 8.90% 9.35% 01st Dec 16
Axis Bank MCLR Base Rate 8.65% - 9.15% 9.35% 18th Nov 16
PNB Housing Finance PLR - 14.35% 27th Apr 15
LIC Housing Finance PLR - 14.20% 10th Oct 15
Citibank MCLR Base Rate 8.10% - 8.20% 9.10% 07th Dec 16
Standard Chartered Bank MCLR Base Rate 8.50% - 9.40% 9.50% 08th Dec 16
DBS Bank MCLR Base Rate 8.35% - 8.50% 8.85% 07th Dec 16
DHFL PLR - 18.30% 08th Oct 15
Capital Local Area Bank MCLR Base Rate 10.00% - 10.00% 10.40% 01st Jun 16
Bandhan Bank MCLR Base Rate 11.73% - 12.00% 12.00% 17th Oct 16
United Bank of India MCLR Base Rate 9.20% - 9.40% 9.65% 17th Oct 16
Bajaj Finserv PLR - 20.16% 01st May 14
Federal Bank MCLR Base Rate 8.95% - 9.40% 9.63% 01st Dec 16
Abhyudaya Cooperative Bank PLR - 13.00% 01st Jun 16
IDFC Bank MCLR Base Rate 8.75% - 9.25% 9.50% 01st Dec 16
Vijaya Bank MCLR Base Rate 9.20% - 9.55% 9.65% 18th Aug 16
LT Housing Finance PLR - 17.35% 31st Dec 69
IIFL PLR - 17.50% 01st Apr 14
Bank of Baroda MCLR Base Rate 8.80% - 9.25% 9.60% 07th Dec 16
Corporation Bank MCLR Base Rate 9.00% - 9.45% 9.65% 01st Dec 16
IDBI Bank MCLR Base Rate 8.75% - 9.70% 9.65% 01st Oct 16
Indian Bank MCLR Base Rate 9.15% - 9.65% 9.65% 07th Oct 16
Indian Overseas Bank MCLR Base Rate 9.30% - 9.70% 9.70% 01st Oct 16
OBC MCLR Base Rate 9.10% - 9.40% 9.65% 10th Oct 16
PNB MCLR Base Rate 8.90% - 9.45% 9.60% 01st Dec 16
SBBJ MCLR Base Rate 8.75% - 9.30% 9.70% 01st Dec 16
Syndicate Bank MCLR Base Rate 9.30% - 9.45% 9.60% 07th Oct 16
Reliance Capital PLR - 18.00% 01st Nov 15
GIC Housing Finance PLR - 15.00% 30th Nov -1
Edelweiss PLR - 17.50% 30th Nov 15
Repco Home Finance PLR - 16.00% 31st Dec 69
IndusInd Bank MCLR Base Rate 8.80% - 9.60% 10.60% 17th Nov 16
Karur Vysya Bank MCLR Base Rate 9.50% - 9.90% 10.30% 07th Oct 16
Kotak Bank MCLR Base Rate 8.60% - 9.25% 9.40% 01st Dec 16
Ratnakar Bank MCLR Base Rate 10.00% - 10.50% 10.60% 22nd Sep 16
Yes Bank MCLR Base Rate 8.50% - 9.25% 10.25% 01st Nov 16
BNP MCLR Base Rate 8.00% - 8.75% 8.90% 01st Dec 16
Deutsche Bank MCLR Base Rate 7.60% - 9.10% 9.10% 07th Dec 16
HSBC Bank MCLR Base Rate 7.90% - 8.30% 9.10% 01st Dec 16
HDFC Bank MCLR Base Rate 8.65% - 9.05% 9.25% 07th Dec 16
Indiabulls PLR - 17.05% 08th Oct 15
Bank of Maharashtra MCLR Base Rate 9.05% - 9.60% 9.70% 01st Oct 16
Canara Bank MCLR Base Rate 9.05% - 9.30% 9.65% 01st Nov 16
Central Bank of India MCLR Base Rate 8.90% - 9.35% 9.70% 01st Dec 16
Dena Bank MCLR Base Rate 9.10% - 9.30% 9.70% 01st Dec 16
Punjab and Sind Bank MCLR Base Rate 9.30% - 9.75% 9.75% 05th Oct 16
State Bank of Hyderabad MCLR Base Rate 8.90% - 9.35% 9.75% 01st Dec 16
State Bank of Mysore MCLR Base Rate 9.10% - 9.70% 9.65% 01st Dec 16
State Bank of Patiala MCLR Base Rate 8.95% - 9.35% 9.65% 15th Nov 16
State Bank of Travancore MCLR Base Rate 8.85% - 9.45% 9.95% 01st Dec 16
UCO Bank MCLR Base Rate 9.10% - 9.45% 9.70% 10th Nov 16
Bank of India MCLR Base Rate 9.00% - 9.25% 9.65% 07th Dec 16
Andhra Bank MCLR Base Rate 9.25% - 9.45% 9.70% 15th Oct 16
Allahabad Bank MCLR Base Rate 9.15% - 9.45% 9.70% 10th Oct 16
Catholic Syrian Bank MCLR Base Rate 9.40% - 10.10% 10.25% 01st Dec 16
City Union Bank MCLR Base Rate 9.50% - 9.75% 10.50% 05th Sep 16
Development Credit Bank MCLR Base Rate 9.28% - 10.79% 10.64% 25th Aug 16
Dhan Laxmi Bank MCLR Base Rate 9.55% - 10.35% 11.40% 07th Dec 16
Karnataka Bank MCLR Base Rate 8.90% - 9.15% 10.25% 01st Oct 16
South Indian Bank MCLR Base Rate 9.00% - 9.80% 10.00% 01st Dec 16
Tamilnad Mercantile Bank MCLR Base Rate 9.75% - 10.00% 10.40% 01st Dec 16
Jammu And Kashmir Bank MCLR Base Rate 8.75% - 9.55% 9.50% 10th Oct 16
Lakshmi Vilas Bank MCLR Base Rate 10.20% - 10.25% 10.50% 01st Oct 16
Nainital Bank MCLR Base Rate 8.70% - 9.00% 9.75% 07th Oct 16
Union Bank of India MCLR Base Rate 9.05% - 9.40% 9.55% 01st Dec 16

Base Rate

  • Base Rate 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.

PLR

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

How does MCLR base rate works?

You need to consider two parameters while taking floating rate home loan or business loan
  • 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 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 price with the 3 month MCLR as the benchmark.
  • Spread: You need to consider the spread (margin that you pay over the banks MCLR) for the particular loan type of the bank. The margin charged would be fixed at time of sanction and can be changed only if there is 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%.

MCLR Base rate

  • Borrowers who have taken loan from banks before 1st April 2016, their loan will be priced at base rate, instead of MCLR
  • 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 for this is MCLR is closely linked to repo rate, and hence it has improved the transmission of RBI’s repo rate cut to the end borrower
  • In the current economic scenario where interest rate and bonds yields are falling, and hence banks are compelled to reduce the MCLR, it would be wise to switch from base rate to MCLR rate regime. All existing borrowers have the option of shifting to MCLR regime by paying a conversion fee of 0.5-1% of the loan amount

Impact of MCLR on Interest rate, loan tenure and EMI’s

  • As MCLR is closely linked to cost of funds of banks and the repo rate, hence any change in the repo rate will impact your floating interest rate on home loan or business loan
  • When a bank reduces the MCLR, your interest rate on floating home loan will be reduced. Generally this will not have any impact on EMI paid but it will impact the loan tenure
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News - Dec 2016
09th Dec 16 Kotak Mahindra Bank to launch Kona Kona Cashfree, a nationwide digital banking initiative
Kotak Mahindra Bank has announced the launch of a pan India digital banking initiative with Kona Kona Cashfree. The idea is to promote cash free transactions by giving incentives, educating and making people aware of various digital payment options available. The initiative is taken to complement the vision of Digital India. The bank has already launched a range of digital banking apps such as Kaypay, an UPI based application and Kotak Bharat, first of its kind multi lingual app in India that does not require internet connectivity.
09th Dec 16 PNB organizes financial literacy cum Digital Banking camp
Punjab National Bank organised an awareness camp on Digital Banking. The camp was held at the branch of village Kotli Jabowal, Arnia on Indo-Pak border. The focus of the camp was to spread awareness about the benefits of opening a saving account and using digital banking applications.
09th Dec 16 MSME ministry to consider increasing cash withdrawal limit for micro units
Ministry for Micro, small and Medium Enterprises (MSME) is planning to increase the cash withdrawal limit for MSMEs to Rs. 2 lacs per week. MSMEs in India are significantly dependent on cash transactions and hence any efforts to move them towards digitisation have to be a gradual process. The main objective of government is to boost the growth of MSMEs in digitisation but without any irregularities in cash availability.
08th Dec 16 Canara Bank cuts MCLR by 15 basis points
Canara Bank has reduced its overnight and three months marginal cost of lending rate to 8.90 and 9.05 percent from 9.05 and 9.20 percent earlier. The bank has also reduced its six months and one year lending rates by 15 basis points to 9.10 and 9.15 percent from 9.25 and 9.30 percent respectively. Revised rates are effective from 7th December, 2016.
08th Dec 16 RBI stunned market with unchanged repo rate
Reserve Bank of India announced its fifth biannual monetary policy on 7th December, 2016. In the latest policy, RBI has left the repo rate unchanged that stands at 6.25 per cent. However, banks were given a liquidity boost with RBI withdrawing the 100 percent incremental cash reserve ratio (CRR) requirement which was imposed in late November post demonetisation.
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