SBI’s move follows an off-cycle rate hike by the Reserve Bank of India which increased the repo rate from 0.40% to 4.40%.
SBI’s move follows an off-cycle rate hike by the Reserve Bank of India which increased the repo rate from 0.40% to 4.40%.
The country’s largest lender State Bank of India has increased its marginal cost based lending rate by 10 basis points or 0.1% across all tenures, a move that will lead to an increase in EMIs for borrowers.
This is the second hike in a month, with two consecutive hikes increasing costs by 0.2%.
The revision follows an off-cycle rate hike by the Reserve Bank earlier this month. The central bank increased the repo rate – at which it lends short-term money to banks – from 0.40% to 4.40%.
Revision in lending rate by SBI (State Bank of India) is likely to be followed by other banks in the coming days.
With the increase, EMIs will increase for borrowers who have taken loans at MCLR (Marginal Cost of Funds Based Lending Rate) and not for those whose loans are linked to other benchmarks.
SBI’s external benchmark based lending rate (EBLR) is 6.65%, while the repo-linked lending rate (RLLR) is 6.25% with effect from April 1.
Banks add credit risk premium (CRP) on EBLR and RLLR while granting any type of loan including housing and auto loans.
According to the information posted on SBI’s website, the revised MCLR rate is effective from May 15.
With the revision, the one-year MCLR has increased to 7.20% from 7.10% earlier.
The one-night, one-month and three-month MCLR rose 10 basis points to 6.85%, while the six-month MCLR rose to 7.15%.
Most of the loans are linked to the one-year MCLR rate.
At the same time, the two-year MCLR increased by 0.1% to 7.40%, while the three-year MCLR increased to 7.50%.
After the revision of rates by RBI, many banks have already increased the interest rates and some more are expected to be implemented in the coming days.