SBI hikes MCLR rates across tenors by 15 bps; EMI debt burden increases | Rare Techy


The country’s largest lender, State Bank of India has changed the marginal cost of funds lending rate (MCLR) by 15 basis points (bps) across tenors, making most consumer loans more expensive for borrowers. According to the bank’s website, the revised rates will come into effect from today, November 15.

Following the latest rate hike, overnight MCLR rates remain unchanged at 7.60%. The one-year MCLR rate has come down by 10 bps to 8.05%, against 7.95% previously.

The one-year tenor MCLR is used to price most consumer loans, such as home, auto and personal loans.

Meanwhile, the two-year and three-year MCLRs (8.15% and 8.25%) have been raised by 10 basis points to 8.25% and 8.35% each, SBI said in a release.

One-month and three-month MCLRs increased by 15 bps each to 7.75% from 7.60% earlier. Six-month MCLR rises by 15 bps to 8.05%.

MCLR or marginal cost of funds-based lending rate is the lowest rate at which a bank can provide loans to its customers.

Any change in the loan rate will directly affect the cost of loans, because it means an increase in the loan interest rate. If the interest rate on the loan increases, the EMI will automatically increase unless the bank reduces its markup/margins on the loans. Hence, borrowers will now have to pay more to pay their EMIs for MCLR-linked loans.

Shares of SBI rose 1.43 percent to settle on 601.05 each on BSE.

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