SBI Raises MCLR Rates

The State Bank of India (SBI), the largest government bank in the country, has recently announced an increase in its Marginal Cost of Funds-Based Lending Rate (MCLR). This means that borrowing money from the bank has become more expensive for customers. Specifically, the bank raised the MCLR by 0.05% for certain periods, which directly impacts the interest rates on loans such as personal, vehicle, and home loans. As of Friday, the one-year MCLR, which is a crucial benchmark for long-term loans, is now set at 9%.

Impact on Borrowers

This increase in MCLR is significant since 42% of SBI’s loan portfolio is linked to this rate, according to the bank’s chairman, CS Shetty. While the MCLR for one day, one month, two years, and three years has remained unchanged, the rates for three and six months have been adjusted upward. With the bank having raised the MCLR twice recently, borrowers should be prepared for higher repayment amounts on their existing loans that are tied to this rate. It’s important for customers to keep an eye on how these changes might affect their financial planning.

Banking Environment and Future Outlook

Chairman CS Shetty also pointed out that deposit rates across the banking system are currently at their highest levels. This context is important as it highlights the challenges both banks and borrowers face in the current economic environment. Despite the Reserve Bank of India’s (RBI) decision not to alter any policy rates, SBI has moved ahead with these increases. This decision reflects the bank’s strategy to align its lending rates with market conditions, which could affect many customers who are considering taking out loans in the near future.

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SBI Increases MCLR Rates

The State Bank of India (SBI) has raised its Marginal Cost of Funds-Based Lending Rate (MCLR) by 0.05%, making loans more expensive. The one-year MCLR, crucial for loans like personal, vehicle, and housing, is now set at 9%. SBI Chairman C.S. Shetty noted that 42% of the bank’s loans are tied to MCLR, while the remainder uses external benchmarks. MCLR for three and six months has also increased, although rates for one month, two years, and three years remain unchanged.

SBI Raises MCLR Rates, Making Loans More Expensive Amid High Deposit Rates and Recent Increases.