SBI raises MCLR rates by 10 basis points; Loans, EMI to become more expensive
India’s largest lender, the State Bank of India (SBI), has raised its marginal cost of lending rate (MCLR) on loans by 10 basis points, effective Friday, July 15. The move follows similar move by several other lenders amid repo rate hikes by the Reserve Bank of India (RBI) to control inflation in the country.
Rising MCLR will increase loan interest rates for new and existing borrowers, including monthly equivalent payments (EMI) for home loans, auto loans, or any other loan tied to this benchmark rate.
According to a notification on the state-owned lender’s website. The six-month MCLR rose from 7.35% to 7.45%, while its two-year and three-year MCLR increased by 10 basis points to 7.70% and 7.80%, respectively.
Here is the SBI’s MCLR by tenor effective as of July 15, 2022, according to the lender’s website:
Overnight: old rates — 7.05%; New rate — 7.15%
A month: old rates — 7.05%; New rate — 7.15%
Three months: old rates — 7.05%; New rate — 7.15%
Six months: old rates — 7.35%; New rate — 7.45%
One year: old rates — 7.40%; New rate — 7.50%
Two years: old rates — 7.60%; New rate — 7.70%
Three years: old rates — 7.70%; New rate — 7.80%
The SBI has increased its MCLR on loans since April 2022. Previously, the SBI had increased the marginal cost of lending rate by up to 20 basis points with effect from June 15, 2022. In addition to the MCLR, the lender has increased its rate external interest linked to the benchmark. rate in June 2022. Its EBLR is 7.55% + CRP, while its RLLR is 7.15% + CRP.
Recently, HDFC Bank and ICICI Bank have also increased their MCLR rates. HDFC Bank increased its marginal cost of lending rate, or MCLR, for all mandates; while ICICI Bank increased its marginal cost of lending rate, or MCLR, by 20 basis points across all mandates.
To control inflation, the Reserve Bank of India (RBI) raised the policy rate in early June by 50 basis points (bps), which was the second hike in nearly a month after the Monetary Policy Committee of the central bank rose 40 basis points in off-cycle policy review in May. Retail price inflation in May stood at 7.04%, which is above the target limit of 2-6% set by the RBI.
Following this, banks including ICICI Bank, State Bank of India and HDFC Bank also raised their interest rates for deposits and loans.
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