Punjab National Bank (PNB) announced on Thursday a hike in its marginal cost of funds-based lending rate (MCLR) by 0.05 percent, or 5 basis points, across all tenors. This adjustment will lead to higher costs for most consumer loans, including auto and personal loans.

In its regulatory filing, PNB revealed that the benchmark one-year MCLR, which influences the pricing of various consumer loans, will rise to 8.90 percent from the previous rate of 8.85 percent. Additionally, the three-year MCLR has been increased to 9.20 percent, reflecting the same 5 basis points rise.

The MCLR is a key reference rate that banks use to determine the interest rates on loans. The recent increase by PNB follows a broader trend of rising lending rates, which is likely to impact borrowers as loan repayments become more expensive.

This move by PNB may influence other banks to adjust their lending rates accordingly, contributing to a higher overall cost of borrowing in the financial sector.