Question: Recently, MCLR has been increased by SBI and ICICI Bank. In this regard, consider the following statements.
(1) This increase will be effective from September 1, 2018.
(2) This is the minimum interest rate provided by MCLR banks.
(3) MCLR has been implemented from July 1, 2015.
Select the correct option given below?
(a) 1 and,2
(b) 2 and, 3
(c) 1, 2 and, 3
(d) None.
Answer- (a)
Related facts
- State Bank of India (SBI), the largest public sector bank in India and ICICI Bank, the largest private sector bank, has increased its MCLR-Marginal Cost of Funds based Lending Rate.
- This increase will come into effect from September 1, 2018.
- SBI has increased by 20 basis points and ICICI has increased by 15 basis points in MCLR.
- Loans will be expensive by these banks.
About MCLR-
- MCLR stands for Marginal Cost of Funds Based Lending Rate.
- It refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI.
- It is an internal benchmark or reference rate for the bank.
- It was implemented by the Reserve Bank of India from April 1, 2016.
- It was launched in place of the ‘base rate’ system in July, 2010.
Reference-
https://timesofindia.indiatimes.com/business/india-business/sbi-icici-banks-hike-benchmark-lending-rate-by-up-to-0-2/articleshow/65639657.cms
https://indianexpress.com/article/business/banking-and-finance/icici-bank-hikes-1-year-mclr-by-15-bps-rate-higher-than-sbis-5338176/