New Delhi: With effect from Sunday, the largest public sector bank, SBI, has increased its Marginal Cost Of Funds Based Lending Rate (MCLR) by 10 basis points across all tenures. SBI will raise its benchmark lending rates for the second time in two months.
SBI’s one-year MCLR was raised to 7.20 percent on May 15 from 7.10 percent previously. The MCLR has been raised to 7.40 percent for the next two years, up from 7.30 percent previously, and to 7.50 percent for the next three years, up from 7.40 percent previously.
The six-month MCLR has been increased from 7.05 percent to 7.15 percent. The MCLR is now 6.85 percent for three months, one month, and overnight tenures, up from 6.75 percent previously.
SBI boosted this benchmark by 10 basis points last month, ahead of the RBI’s unexpected 40-basis-point hike in the key policy repo rate.
RBI increased the policy repo rate to 4.4 percent from 4 percent earlier this month.
SBI has increased its MCLR by around 20 basis points since April of this year.
The MCLR is the rate below which lenders are not permitted to lend. The vast majority of banks do not provide term loan rates below the MCLR. Many banks, on the other hand, have tied term loans, such as home loans and personal loans, to external benchmark lending rates.
According to RBI data, 45.1 percent of personal loans are connected to the MCLR, while 46.2 percent are linked to the external benchmark as of December 2021. MCLR is tied to 33.1 percent of housing loans, whereas the external benchmark is linked to 58.2 percent.