Consumers expecting reduction in interest rates on loans should now be ready to pay more instead. India's big banks, SBI, PNB, HDFC, and ICICI, have increased lending rates by 0.1 per cent, which would raise interest payable on loans. The other banks have also followed suit with an increase in lending rates by upto 10 basis points. The hike in MCLR has been introduced just four days ahead of the RBI's bi-monthly monetary policy on June 6. MCLR is the minimum lending interest rate below which financing institutions and banks cannot give loans. Most home loans, car loans and other personal loans are largely linked to one-year MCLR and the EMIs across loans are likely to go up, pinching the existing and new borrowers.
