The country’s largest state-owned lender, State Bank of India (SBI), has increased the marginal cost of borrowing rate (MCLR) by 10 basis points (bps) across all tenors, effective today (August 15).
SBI MCLR hikes third in three months
The latest MCLR hike by the SBI comes days after the RBI left the repo rate unchanged at 6.5 per cent. This is the third consecutive month of an MCLR hike by the SBI. The PSU bank has increased the MCLR by up to 30 basis points (bps) in some of the tenors since June 2024.
A basis point is one hundredth of a percentage point. The term is the term of the loan or credit that is granted to the debtor (borrower) to pay the installments of the loan that has been granted to him.
What is MCLR?
Minimum Lending Rate (MCLR) is the minimum lending rate below which a bank cannot lend, except in certain cases permitted by the Reserve Bank of India (RBI). A higher MCLR implies higher interest rates and higher monthly instalments for borrowers and vice versa.
How will your loan payments change?
SBI’s new MCLR for the three-year tenor now stands at 9.1 per cent, from 9 per cent earlier, while the overnight MCLR has been increased to 8.2 per cent from 8.1 per cent.
Similarly, the revised rate for six-month loans is 8.85%, up from 8.75% earlier. Also, the bank will charge a revised rate of 8.95% for one-year loans. The revised rate for two-year loans is now 9.05%.
|
Tenor |
Existing MCLR |
MCLR revised |
| During the night> | 8.1% | 8.2% |
| One month> | 8.35% | 8.45% |
| Three months> | 8.4% | 8.5% |
| Six months> | 8.75% | 8.85% |
| One year> | 8.85% | 8.95% |
| Two years> | 8.95% | 9.05% |
| Three years> | 9% | 9.1% |
MCLR increases by other public sector undertakings
Not just SBI, other PSU banks including Bank of Baroda, Canara Bank and UCO Bank have also increased their MCLRs or lending rates at different tenors, resulting in higher borrowing costs for consumers.
While Bank of Baroda and Canara Bank revised MCLR with effect from August 12, UCO Bank increased the lending rate for specific tenors, effective from August 10, 2024.
First published: August 15, 2024 | 12:18 pm IS
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