Mumbai: The largest lender in the country, State Bank of India (SBI) has hiked the marginal cost of funds-based lending rate (MCLR). The public sector bank has increased the lending rates by 10 basis points (bps) across tenures. After this hike, the Equated Monthly Installments(EMI) of most consumer loans such as auto or home loans will become costlier for consumers. The new rates came into effect yesterday.
SBI hiked the overnight MCLR rate to 7.95% from 7.8%. The MCLR rate of one month tenure has been hiked to 8.10% from 8.00%. The three-month MCLR has been raised to 8.10%. The six-month MCLR stands revised at 8.40%. For one-year maturity, the new rate will be increased to 8.50%. For two-year maturity, MCLR has been hiked to 8.60% while three-year tenure has been raised to 8.70%.
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The basic minimum rate at which a bank can give consumers loans is known as the marginal cost of funds-based lending rate or MCLR. The Reserve Bank of India (RBI) has established MCLR in 2016. It was introduced to determine the interest rates of different types of loans. Borrowers’ EMI will get expensive for those who take loans against the MCLR. There is a reset-period for MCLR-based loans, after which the rates get revised for the borrower.
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