Taking a loan from the State Bank of India (SBI), the country’s largest public sector bank, has become more costly today. SBI has raised its marginal cost of funds-based lending rate (MCLR) by up to 10 basis points (bps) for selected periods. The revised rates, effective from July 15, 2024, apply across various types of loans, including home loans and car loans. This marks the second consecutive increase in lending rates by SBI, with adjustments made in both June and July. As a result, borrowers will face higher borrowing costs and increased equated monthly installments (EMIs).
EMIs for personal and auto loans linked to the MCLR will rise, while home loans tied to the repo rate will remain unchanged.
SBI’s New Interest Rates
SBI has increased the one-month MCLR benchmark rate by 5 basis points to 8.35%, while the three-month MCLR benchmark rate has risen by 10 basis points to 8.40%. Additionally, the bank has raised the MCLR rates for six-month, one-year, and two-year tenures by 10 basis points, setting them at 8.75%, 8.85%, and 8.95%, respectively. The three-year MCLR has been increased by 5 basis points to 9.00%.
| Tenure | Existing MCLR (%) | Revised MCLR (%) |
|---|---|---|
| Overnight | 8.10 | 8.10 |
| One month | 8.30 | 8.35 |
| Three months | 8.30 | 8.40 |
| Six months | 8.65 | 8.75 |
| One year | 8.75 | 8.85 |
| Two years | 8.85 | 8.95 |
| Three years | 8.95 | 9.00 |
Also read: Home Loan Interest Rate: Planning to Buy a House? Check Bank Interest Rates
What is MCLR?
The Marginal Cost of Funds Based Lending Rate (MCLR) is the minimum lending rate below which a bank is not allowed to lend. Borrowers will have to wait for a reduction in high interest rates, as the Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 6.5% in its recent meeting. This is the ninth consecutive meeting in which the central bank has maintained the current rate. Experts do not expect a rate cut in the next meeting.