Mumbai: The State Bank of India (SBI), the country's largest lender, has raised its benchmark marginal cost of lending rate (MCLR) by 5-10 basis points. This hike is expected to lead to an increase in interest rates on loans linked to the MCLR.
The rate for one-month tenure loans has been increased by 5 basis points to 8.35 percent, while the MCLR for three-month tenure loans has been raised by 10 basis points to 8.40 percent. One basis point is equivalent to 0.01 percentage point.
MCLR rates for six-month, one-year, and two-year tenures have each been raised by 10 basis points to 8.75 percent, 8.85 percent, and 8.95 percent, respectively. The three-year MCLR has been increased by 5 basis points to 9 percent. All new rates are effective from July 15.
This marks the second consecutive rate hike by SBI following a 10 basis point increase announced in June. MCLR represents the minimum interest rate below which banks, including SBI, cannot lend loans. While corporate loans are primarily linked to MCLR, retail loans are usually tied to the repo rate, which the RBI has left unchanged since February 2023.
As SBI is considered a benchmark for the industry, other banks are likely to follow suit, potentially leading to a wider increase in MCLR across the banking sector.
Source- IANS