SBI Customers To Pay More EMIs As Bank Hikes MCLR By 10 Basis Points

New Delhi: The State Bank Of India (SBI) has raised its marginal cost fund-based lending rate (MCLR) by 10 basis points (bps) across all tenors.

According to reports, the hike has come into effect from 15 April 2022 and following this, EMIs for customers will increase, who have availed loans on MCLR from SBI.

However, borrowers, whose loans are linked to other benchmarks, won't be required to pay higher EMIs.

Notably, one basis point is equivalent to one-hundredth part of a percentage point.

The one-year MCLR has been revised to 7.10 percent while two- and three-year MCLRs have been raised to 7.30 percent and 7.40 percent, respectively.

An overnight, one-month, and three-month MCLR rose by 10 bps to 6.75 percent, whereas a six-month MCLR increased to 7.05 percent. Most of the loans are linked to the one-year MCLR rate.

Apart from SBI, the Bank of Baroda (BoB) has also announced a hike in the marginal cost of the lending rate. The bank has raised MCLRs by 5 bps across tenors.

The benchmark one-year tenor MLCR is now 7.35 percent with effect from April 12, 2022.

The MCLR is a benchmark interest rate, which is the minimum rate at which banks are allowed to lend. Most loans are linked to the one-year MCLR.

This was introduced by the Reserve Bank of India (RBI) in 2016. The new RBI guideline replaced the base rate for commercial banks to set lending rates.

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