Today, India’s largest public sector bank, SBI, has surprised its customers by announcing an increase in loan interest rates.
Starting today, the higher interest rates have taken effect. As a result, SBI customers will now need to pay increased interest on their loans.
SBI increased interest rates by this much
According to the State Bank of India’s website, the bank has revised its Marginal Cost of Lending Rates (MCLR).
The MCLR has been raised by 5 to 10 basis points, equating to an increase of 0.05 percent to 0.10 percent.
These adjustments took effect today, July 15, as per the bank’s announcement.
EMI burden will increase
SBI, the largest government bank in the country, maintains the highest number of customers compared to other banks.
With the recent increase in SBI’s MCLR, its various loan products could become more expensive.
This may lead to higher interest costs for millions of customers, potentially resulting in increased EMIs.
SBI has raised the following rates:
- MCLR for one-month loans increased by 5 basis points to 8.35%.
- MCLR for three-month loans increased by 10 basis points to 8.4%.
- MCLR for six-month loans increased by 10 basis points to 8.75%.
- MCLR for one-year loans increased by 10 basis points to 8.85%.
- MCLR for two-year loans increased by 10 basis points to 8.95%.
- MCLR for three-year loans increased by 5 basis points to 9%.
Relief to home loan customers
MCLR, or Marginal Cost of Lending Rates, are the minimum rates below which banks do not lend money.
This means that the interest rates on bank loan products are higher than the MCLR rates for the corresponding tenure.
Fortunately, the increase in MCLR will not impact SBI home loan customers, as SBI bases its home loan interest rates on external benchmark lending rates.
Currently, SBI has not made any changes to these external benchmark lending rates (EBLR).
