The State Bank of India (SBI) has decided to increase its marginal cost of lending rate (MCLR) on loans by 10 basis points, or 0.10 per cent. The new lending rates will come into effect from today, July 15.
The bank has decided to increase the MCLR to 7.50 percent from the current 7.40 percent, as per the State Bank of India's website. The MCLR will be increased from 7.35 percent to 7.45 percent for the six-month tenor.
The MCLR on the two-year tenor will be increased from 7.60 per cent to 7.70 per cent. On the three-year tenor, it will be increased from 7.7 per cent to 7.8 per cent. How the MCLR hike will impact retail borrowers
It means that retail loans for homes, cars, or personal items could go up, which will also affect your Equated Monthly Installments (EMIs).
SBI's home loan rates vary from 7.05% to 7.55% depending upon the CIBIL score. SBI auto loan interest rates vary from 7.45% to 8.15%.
MCLR is the minimum lending rate below which banks are not allowed to lend. Every month, banks revise their MCLR rates depending on market conditions. MCLR is different for various tenors, ranging from overnight to three years. It is derived based on the components such as the marginal cost of funds, operating costs, cash reserve ratio (CRR), and tenure premium.
Private lender, IDFC First Bank, also hiked benchmark lending rates by 10 to 15 basis points on various tenures. The new rates of Marginal Cost of Funds based Lending Rate (MCLR) have come into effect from July 8, 2022.