Banks hike lending rates against RBI's policy meet

Major lenders, including State Bank of India (SBI), HDFC, ICICI Bank, Kotak Bank, Union Bank and Punjab National Bank (PNB), have increased interest rates on loans by 10 basis points ahead of the Reserve Bank of India’s monetary policy committee’s (MPC) meeting. 

Effective 1 June, country's largest lender State Bank of India (SBI) raised its marginal cost of funds based lending rates (MCLR) by 10 basis points across the tenors. The overnight MCLR has been raised to 7.9 per cent with effect from Friday. The one-month MCLR, likewise, has been raised to 7.9 per cent, 10 basis points higher than the earlier rate. The three month MCLR will now stand at 7.95 per cent while the six-month MCLR has been increased to 8.1 per cent. 
Similarly, the one-year MCLR, two-year MCLR and three-year MCLR have been raised to 8.25 per cent, 8.35 per cent and 8.45 per cent. The increase of SBI fixed deposit (FD) rates that took place on May 28 has led to the increase in lending rates. Check the SBI's latest FD rates here.
HDFC has increased its retail prime lending rate (PLR) — its benchmark for home loans — by 10bps while ICICI Bank hiked its one-year MCLR by 10bps to 8.40 per cent.
HDFC’s home loans will now start at 8.5 per cent. The new rates come into effect from 2 June 2018.
PNB has hiked one-year MCLR to 8.4 per cent from 8.3 per cent earlier. Union Bank increased rates by 10bps to 8.45 per cent. But Kotak Bank has increased its one-year MCLR by a sharp 20bps to 8.9 per cent.
On Friday, the third largest private lender, Axis Bank, hiked rates on deposits by introducing a new tenure of 12 months, 5 days to under 12 months, 11 days — to 7.4 per cent.
Another private lender, Mangaluru-based Karnataka Bank, raised rates to 7.25 per cent from 7.10 per cent on deposits for a period of 1 year to 2 years. Earlier this week, SBI hiked term deposit rates for amounts of less than Rs1 crore by up to 25bps.
The marginal cost of lending rate (MCLR) is reviewed every month by banks and reflects their cost of funds. Following the latest hike, SBI’s one-year MCLR stands at 8.25 per cent versus 8.15 per cent earlier. This is the second rate hike by the bank in 2018.