Brace for costlier home, auto loans as SBI raises lending rates by 20 bps

Home, auto and other loans would become costlier as the country's largest lender SBI Saturday increased its benchmark lending rates or MCLR by 20 basis points, a development followed by other lenders.

The new rates are effective from Saturday.

State Bank of India (SBI) has increased the lending rate by 20 basis points across all tenors up to three years.

Now SBI's overnight and one-month tenors' Marginal Cost of Funds Based Lending Rate (MCLR) stands at 8.1 per cent as against 7.9 per cent, as per the SBI's website.

The MCLR for a one-year tenor increased to 8.45 per cent from 8.25 per cent earlier. Most of the retail loans are benchmarked against one-year MCLR.

The MCLR for a three-year tenor increased to 8.65 per cent from 8.45 per cent.

The rate hike by bank comes a month after the Reserve Bank of India (RBI) hiked benchmark lending rate called repo rate by 25 basis points to 6.5 per cent.

RBI had last raised the repo rate on June 6 by 0.25 per cent to 6.25 per cent. That increase was the first since January 28, 2014 when rates were hiked by a similar proportion to 8 per cent.