SBI raises MCLR by 10 bps across tenors

The revised MCLR for two-year and three-year MCLRs are 8.85 per cent and 8.95 per cent, respectively. The new rates are effective from today.

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State Bank of India (SBI) raised the marginal cost of the fund-based lending rate (MCLR) by 10 basis points (bps) across all tenures. The increase in MCLR by SBI comes days after the Reserve Bank of India (RBI) left the key policy rate unchanged.
The move is likely to be followed by other lenders, resulting in costlier loans for borrowers.

The country’s largest lender has revised one year MCLR to 8.75 per cent from 8.65 per cent. Onernight MCLR has been raised to 8.1 per cent from 8 per cent. The one and three-month MCLR have been revised upwards to 8.3 per cent each from 8.2 per cent earlier.

The revised MCLR for two-year and three-year MCLRs are 8.85 per cent and 8.95 per cent, respectively. The new rates are effective from today.

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Last week, the RBI’s Monetary Policy Committee (MPC) left the repo rate – the key policy rate – unchanged at 6.5 per cent on concerns over rise in food inflation. Introduced on April 1, 2016, MCLR is the minimum interest rates below which banks cannot lend. It reflects the trends in banks’ cost of borrowing.

In 2019, the RBI introduced the external benchmark linked rate (EBLR) – which is linked to the repo rate – to further increase the pace of monetary policy transmission. Currently, all the retail loans are linked to EBLR.

While any hike or cut in the repo rate gets immediately reflected in loans linked to EBLR, banks review interest rates under MCLR regime every month at a pre-announced date.

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