On Wednesday, Kotak Mahindra Bank raised its marginal cost of fund-based lending rate (MCLR) by ten basis points. So, the lender’s one-year MCLR is 8.55%, according to the information on its website. The short-term MCLR is in the range of 7.8-8.4%, while the two- and three-year MCLRs are 8.85% and 9.05%, respectively.

The bank has boosted MCLR by 90 basis points since June. After the Reserve Bank of India (RBI) raised its repo rate by 50 basis points in September, the bank raised lending rates by 20 basis points each in June and July and another sizable hike of 25 basis points in October. So far, RBI has raised the repo rate by 190 basis points since June.

69% of the bank’s total loan book is linked to floating rates, with 53% linked to the External Benchmark Related Lending Rate (EBLR) and 16% linked to MCLR. The portfolio of loans linked to fixed rates accounted for 31%, of which 22% were loans with maturities of less than one year. In addition, to boost lending rates, banks are also raising deposit rates to support credit growth. Kotak Mahindra Bank has a high CASA ratio of 56% and has locked out savings account deposits into long-term deposits, leading to a 16% YoY growth in retail term deposits in 2QFY23.