SBI Hikes MCLR by 10 Basis Points, Third Consecutive Increase

This rate hike follows the Reserve Bank of India’s (RBI) decision to keep its benchmark lending rate unchanged at 6.5 per cent for the ninth consecutive time earlier this month

Update: 2024-08-16 15:02 GMT
State Bank of India. (Image: PTI)

Mumbai: The country’s largest lender State Bank of India (SBI) has raised its Marginal Cost of Funds-based Lending Rate (MCLR) by 10 basis points across all tenors impacting largely some old individual borrowers or companies whose loans are still linked to MCLR. This marks the third consecutive MCLR hike by the bank and is effective August 15.

According to Vipul Patel, founder, of Mortgageworld, a home loan advisory company, “While new borrowers have their loan rates linked to Repo Linked Lending Rate (RLLR) which is linked to RBI’s repo rate plus bank’s margin or spread, the old borrowers too have been shifted to RLLR. So, a hike in MCLR will not impact most of the home or consumer loan borrowers. This is more likely to impact companies whose loans are still linked to MCLR.”

“However, we would like to advise individuals whose loans are still linked to MCLR to shift to RLLR,” added Patel.

The benchmark one-year MCLR has increased from 8.85 per cent to 8.95 per cent. The two-year and three-year MCLRs are now set at 9.05 per cent and 9.10 per cent, respectively. Shorter tenors have also seen a rise, with one-month, three-month, and six-month MCLRs now ranging between 8.45 per cent and 8.85 per cent. The overnight MCLR has been adjusted from 8.10 per cent to 8.20 per cent.

This rate hike follows the Reserve Bank of India’s (RBI) decision to keep its benchmark lending rate unchanged at 6.5 per cent for the ninth consecutive time earlier this month.

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