Mumbai: Close on the heels of the Reserve Bank of India (RBI) raising its benchmark repo rate, a host of banks have raised lending rates and deposit rates. The latest entrant is the country’s largest lender State Bank of India (SBI), which has hiked its marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps) effective Wednesday.
The move would increase the equated monthly instalments (EMIs) for retail and small and medium enterprises (SME), whose loan contracts are based on MCLR. The borrowers, whose loans are linked to repo linked lending rate (RLLR), see an immediate hike every time the RBI hikes the repo rate.
SBI has also hiked its deposit rates and introduced a special term deposit of 400 days offering 7.10 per cent. This scheme is valid till March 31, 2023. The public sector lender has increased its interest rates for fixed deposits or term deposits by five basis points to 25 basis points on amounts below ₹2 crore, which are effective from February 15, 2023. Interest rates for senior citizens would be 25 basis points more than the rates offered to general investors.
SBI’s benchmark one-year MCLR, which was used as base for fixing most of home, auto and personal loans, has been raised by 10 basis points from 8.40 per cent to 8.50 per cent. For a two-year tenure, the new MCLR is 8.60 per cent from 8.50 per cent. The rate for three-year tenure has been raised to 8.70 per cent from 8.60 per cent. SBI has increased the overnight MCLR rate by 10 bps to 7.95 per cent from 7.85 per cent. The rate for one month tenure has been hiked to 8.10 per cent from 8 per cent. The three-month MCLR is now 8.10 per cent while the six-month MCLR stands at 8.40 per cent. SBI’s new MCLR rates are effective from February 15, according to its website.
The RBI raised the repo rate by 25 basis points to 6.5 per cent in its recent monetary policy on Febru-ary 8, 2023. So far a host of lenders including Bank of Baroda, Bank of India, Punjab National Bank, Indian Overseas Bank have hiked loan rates.
