SBI hikes MCLR-linked lending rates by 0.10%
18 Aug 2024
State Bank of India (SBI), the country’s largest public sector lender, has increased its Marginal Cost of Funds Based Lending Rate (MCLR) by 0.10 percentage points, beginning 15 August, a move which will increase interest burden on its borrowers.
With this, SBI has raised lending rates by 30 basis points, for some tenures, in three consecutive moves since June 2024.
It may be noted that SBI's decision to raise its MCLR-linked lending rates comes after the Reserve Bank of India (RBI) decided to keep the policy repo rate unchanged at 6.5 per cent, in order4 to keep interest rates steady.
SBI’s move reflects the rising cost of deposits for the state-owned lender or a difference in its market perceptions.
While SBI decided to raise its MCLR-linked rates, another state-owned lender Karur Vysya Bank has announced a 0.15 basis point reduction in its External Benchmark Lending Rate (EBLR) from 10.05 per cent to 9.9 per cent, effective August 19.
EBLR, like MCLR, is a benchmark rate used to determine the cost of loans, and is set independently by the bank.
The reduction in EBLR-linked rates would lower cost of borrowing for the bank’s customers.
