The State Bank of India (SBI), the nation’s largest state-run lender, has increased its marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps) across all tenors, effective from August 15, 2024. This adjustment follows closely on the heels of the Reserve Bank of India’s (RBI) decision to maintain the repo rate at 6.5 per cent.
With this latest hike, SBI has raised the MCLR by up to 30 bps across various tenors since June 2024. The revised rates will see the MCLR for a three-year tenor now stand at 9.1 per cent, up from 9 per cent. Similarly, the overnight MCLR has increased from 8.1 per cent to 8.2 per cent. The six-month MCLR has been adjusted to 8.85 per cent from the previous 8.75 per cent, while the one-year loan MCLR is now 8.95 per cent. For two-year tenors, the new MCLR is set at 9.05 per cent.
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MCLR serves as the minimum lending rate below which banks are not permitted to lend, except under specific circumstances allowed by the RBI. The increase in MCLR typically translates to higher interest rates and increased EMIs for borrowers.
SBI’s rate hike is part of a broader trend among public sector banks. Other major lenders, including Bank of Baroda, Canara Bank, and UCO Bank, have also raised their MCLR in recent days. Bank of Baroda and Canara Bank revised their MCLR rates on August 12, while UCO Bank’s new rates took effect on August 10, 2024, further increasing the cost of consumer loans across the board.
