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Loans to become costlier as public sector bank hikes lending rates

Mumbai: Largest public sector bank in the country, State Bank of India (SBI) has increased its benchmark marginal cost of lending rate (MCLR). The lending rate is increased  by 5-10 basis points. This new rate will be  effective from Monday, July 15, 2024.

As a result, interest rates on loans are expected to rise by a similar amount, causing EMIs on linked loans to increase. 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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SBI has raised the MCLR on 1-year loan tenures by 10 basis points to 8.85 percent. Similarly, the MCLR for 3-month, 6-month, and 2-year loan tenures has been increased by 10 basis points each, reaching 8.4 percent, 8.75 percent, and 8.95 percent, respectively.

Prior to this, SBI had raised the MCLR for various tenures by 10 basis points in mid-June, bringing the benchmark rate for 1-year loans to 8.75 percent at that time.

 

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