State Bank of India (SBI) has increased its marginal cost of lending rates (MCLR) by 5 to 10 basis points (bps) for most tenures from today, July 15. Shares of State Bank of India, India’s largest public sector bank (PSB), are trading at ₹868.00, up 0.97 percent from its previous close.
SBI MCLR increase
MCLR on overnight lending period increased by 5 bps to 8.10 percent.
MCLR on loan tenure of one month increased by 10 bps to 8.35 percent.
MCLR on loan tenure of three months increased by 10 bps to 8.40 percent.
MCLR on loan tenure of six months increased by 10 bps to 8.75 percent.
MCLR on loan tenure of one year increased by 10 bps to 8.85 percent.
MCLR on loan tenure of two years increased by 10 bps to 8.95 percent.
MCLR on loan tenure of three years increased by 5 bps to 9.00 percent.
Less than a month ago, rates were hiked by 10 bps around mid-June, taking the one-year benchmark loan to 8.75 percent.
Impact on loan and EMI
The increase is likely to impact customers’ loans and Equated Monthly Installments (EMI). Most corporate loans will also be affected. Notably, loans like personal or auto loans that are linked to MCLR will see their EMIs increase, while home loans that are linked to the repo rate will not see an increase.
There has been no change in the repo rate. The Reserve Bank of India has maintained it at 6.5 percent from February 2023. A 4:2 majority of the RBI Monetary Policy Committee (MPC) decided to keep the repo rate unchanged, marking the eighth time the central bank has kept rates steady. The three-day RBI MPC meeting was held from June 5 to June 7 under the chairmanship of RBI Governor Shaktikanta Das.
MCLR is the minimum interest rate below which the bank should not charge. This concept was introduced in April 2016.
