State Bank of India (SBI), Axis Bank, Bank of Baroda and Kotak Mahindra Bank increased their MCLR in April. The interest rate on the loan is likely to increase in May and the bank charges are set to change.
New Delhi . The interest rate on the loan is likely to increase in May and the bank charges are set to change. Swing pricing mechanism will be implemented in mutual funds and asset management companies will be able to invest more in their schemes. Here we are telling you about many such changes in May.
State Bank of India (SBI), Axis Bank, Bank of Baroda and Kotak Mahindra Bank increased their benchmark marginal cost of funds based lending rates (MCLR) in April. SBI increased its MCLR by 10 basis points for all time frames and the other three banks increased it by five basis points.
Loan rate will increase
Home loan and auto loan will increase due to increase in MCLR. SBI’s MCLR is 7.1 percent for one year tenure, 7.3 percent for two years and 7.4 percent for three years. In Axis Bank, the MCLR for tenures of one, two and three years is 7.4 per cent, 7.5 per cent and 7.55 per cent respectively. MCLR is an internal reference rate for banks set by the Reserve Bank of India to help determine the minimum interest rate on various types of loans.
Savings, salary account charges
Kotak Mahindra Bank will implement new rules for savings and salary account holders from May 1. The bank has increased the charge for not maintaining the minimum balance. The bank will also charge a fee for checks issued and returned for non-financial reasons. In such a case, it will cost the customer Rs 50. Fee has been increased in another case related to cheque.
Swing Pricing in Mutual Funds
SEBI will implement swing pricing for mutual fund schemes from May. Its purpose is to prevent large investors from making sudden withdrawals of large sums of money. In order to ensure fairness in the entry, exit of mutual fund schemes and dealing with existing investors during market volatility, the new rules were to come into effect from March 1, but it got delayed. Now these rules are in effect.
AMCs will invest more in their schemes
According to SEBI rules, from May, fund houses will have to invest more in their schemes. Its objective is to keep the interests of the asset manager and the investors alike. AMCs will invest 0.03 per cent to 0.13 per cent of their asset base in their mutual fund schemes. The limit of such investment will vary according to the risk level of the scheme.
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