SBI MCLR Hike Latest Update: The State Bank of India (SBI), on Wednesday hiked marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps), which will now make loans including home loans, auto loans and personal loans costlier for customers. The move from the SBI comes after the RBI raised the key repo rate by 25 basis points (bps) to 6.50 per cent. For the unversed, the MCLR is the minimum lending rate below which a bank cannot lend.
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The SBI on its website said it has increased the overnight MCLR rate by 10 bps from 7.85 per cent to 7.95 per cent, effective February 15, 2023. According to SBI, the MCLR for the one-month tenure has also been increased by 10 bps, from 8.00 per cent to 8.10 per cent.
The SBI said it has increased its three-month MCLR to 8.10 per cent, compared with 8.00 per cent earlier. The six-month MCLR stands at 8.40 per cent, which was 8.30 per cent earlier.
As per the SBI, the one-year MCLR has been hiked to 8.50 per cent, against 8.40 per cent earlier. The bank said for a two-year tenure, the new MCLR is 8.60 per cent, compared with 8.50 per cent earlier. The rate for three-year tenure has been raised to 8.70 per cent from 8.60 per cent.
What is MCLR?
The MCLR is an internal reference interest rate for banks to offer loans at a competitive and transparent rate. In simple words, the MCLR is the minimum rate of interest banks are allowed to give out loans to its customers.
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Why SBI Hiked MCLR?
As the RBI hiked the repo rate by 25 basis points to 6.50 per cent, the move has made credit for banks costlier, as the repo rate is the rate at which the RBI lend money to the banks. After the repo rate hike, several public and private sector banks are increasing their MCLR.
How SBI MCLR Hike Will Impact Loan Borrowers?
With the MCLR hike by the SBI, the interest rates of personal loans, home loans and auto loans will increase. And the move will affect those who have floating rate loans, not the fixed interest rate loans.
