The State Bank of India (SBI), has announced an increase in its Marginal Cost of Funds-Based Lending Rate (MCLR) by 10 Basis Points (bps) across all tenors, that will be implied from 15th, August, 2024. This adjustment follows the Reserve Bank of India’s (RBI) recent decision to maintain the repo rate at 6.5 per cent.
With this latest increase, SBI has raised its MCLR by up to 30 bps across various tenors since June 2024. The revised rates set the MCLR for a three-year tenor at 9.1 per cent, up from 9 per cent. The overnight MCLR now stands at 8.2 per cent, up from 8.1 per cent, while the six-month MCLR has been adjusted to 8.85 per cent from the previous 8.75 per cent. The one-year MCLR has increased to 8.95 Per cent, and the two-year MCLR now stands at 9.05 per cent.
MCLR serves as the minimum lending rate below which banks are not allowed to lend, except under specific conditions permitted by the RBI. An increase in MCLR generally results in higher interest rates and increased EMIs for borrowers.
SBI’s rate hike is in line with a broader trend among public sector banks. Other major lenders, including Bank of Baroda, Canara Bank and UCO Bank, have also raised their MCLR rates in recent days. Bank of Baroda and Canara Bank adjusted their rates on 12th August, while UCO Bank’s revised rates took effect on 10th August, 2024, further impacting the cost of consumer loans across the sector.
