EMIs for home and car loans set to rise; this private bank has hiked interest rates—find out when the new rates take effect..

A private bank in the country has announced a hike in interest rates. Consequently, if you are a Karur Vysya Bank customer with an existing home loan, car loan, or personal loan, you will have to pay higher EMIs. The private bank has decided to raise its Marginal Cost of Funds-Based Lending Rate (MCLR). The bank disclosed this information in an official filing with the stock exchange. The new rates will come into effect on August 22, 2026.

**What has changed?**
The bank has increased the MCLR by 0.05% to 0.25% across various tenures. This decision will directly impact customers whose loans are linked to the MCLR. As a result of the rate hike, customers will see an increase in their monthly installments (EMIs).

**What is MCLR?**
MCLR is the minimum interest rate below which banks cannot lend to customers. Whenever a bank raises the MCLR, floating-rate loans linked to it become more expensive. Customers whose loans are due for a reset will now face higher EMIs. Additionally, availing a new loan from the bank will now be costlier than before.

It is worth noting that most retail loans (such as home loans) are linked to the one-year MCLR. This rate has been raised by 0.05%, increasing from 9.35% to 9.40%.

Karur Vysya Bank offers a range of banking and financial services, including commercial banking and treasury operations. Headquartered in Tamil Nadu, the bank has a market capitalization of ₹32,428 crore. On August 21, the bank's shares were trading at ₹337, showing a slight gain.

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