Bank of Baroda (BoB) on Friday raised its marginal cost of funds-based lending rates (MCLRs) by 10 basis points (bps) across tenures, a day after the Reserve Bank of India (RBI) chose to stay put on the repo rate and lowered its inflation forecast for the year ahead.

The one-year MCLR at the bank now stands at 8.4 per cent, the highest among large banks and at par with the rate at Axis Bank. MCLRs for shorter tenures will range between 7.9 per cent and 8.25 per cent. The new rates will come into effect on Saturday.

BoB and Bank of India are the only large lenders to have held on to MCLRs even as yields in the money markets hardened in the past few months. Some bankers and other industry players have said that the system had been waiting for the RBI’s April monetary policy to take a call on rates.

Most bankers now expect rates to remain flat until the central bank’s next policy review as they expect a possible shortage of liquidity in the days ahead. They would also look to keep interest rates on deposits at attractive levels so as not to lose out on savings.