State Bank of India (SBI), the country's largest lender, has increased its marginal cost of funds based lending rate (MCLR) by 10 basis points (bps) or 0.1 percent across all tenures, raising borrowers' EMIs.
Other banks are anticipated to follow SBI's lead in lowering lending rates in the coming days. The hike will raise EMIs for borrowers who have taken out loans based on the MCLR, but not for those whose loans are based on other benchmarks.
The EBLR rate at SBI is 6.65 percent, and the repo-linked lending rate (RLLR) is 6.25 percent as of April 1. When granting any type of loan, including house and vehicle loans, banks add a Credit Risk Premium (CRP) over the EBLR and RLLR. As per information posted on the SBI website, the increased MCLR rate goes into effect on April 15.
With the change, the one-year MCLR has climbed to 7.10%, up from 7% previously. The overnight, one-month, and three-month MCLRs all climbed by 10 basis points to 6.75 percent, while the six-month MCLR rose to 7.05 percent.
The majority of loans are based on the one-year MCLR rate. At the same period, the two-year MCLR grew by 0.1% to 7.30%, while the three-year MCLR jumped to 7.40%.
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