Mumbai: The largest public sector bank in the country, State Bank of India (SBI) has increased the marginal cost of funds-based lending rate (MCLR). The lender increased the lending rate by 5 basis points (bps). The new rate will come into effect from today, July 15.
The MCLR based rates will now vary between 8% and 8.75%. Earlier on March 15, the lender hiked its benchmark prime lending rate (BPLR) by 70 basis points.
The decision was taken against the backdrop of the Reserve Bank of India’s decision to keep the repo rate at 6.50%. Repo rate is the rate at which the RBI lends short-term funds to commercial banks. In response to rising inflation, the RBI has increased interest rates by 225 basis points since May.
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MCLR is the minimum rate of interest banks are allowed to give out loans to its customers. It is a benchmark interest rate and it dictates the lower limit of the interest rate for a loan.
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