SBI raises MCLR by 10 basis points for all tenors; 3rd hike in 3 months

The country’s largest state-run lender, State Bank of India (SBI), has raised the marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps) across all tenors, effective today (August 15). 

SBI’s 3rd hike in MCLR in three months

The latest increase in MCLR by SBI comes days after the RBI left the repo rate unchanged at 6.5 per cent. This is the third consecutive month of an MCLR hike by SBI. The PSU bank has raised MCLR by up to 30 basis points (bps) in some of the tenors since June 2024.
 

A basis point is one-hundredth of one percentage point. Meanwhile, tenor is the term of the loan or credit given to the debtor (borrower) to disburse the loan installments given by the borrower.

What is MCLR?

MCLR is the minimum lending rate below which a bank is not permitted to lend, except in certain cases allowed by the Reserve Bank of India (RBI). A higher MCLR leads to higher interest rates and higher EMIs for borrowers and vice-versa. 

How will your loan EMIs change?

SBI’s new MCLR for three-year tenor now stands at 9.1 per cent from 9 per cent earlier, while overnight MCLR has been increased to 8.2 per cent from 8.1 per cent.
 

Similarly, the revised rate for six-month MCLR is 8.85 per cent, compared to 8.75 per cent earlier. Besides, the bank will charge an MCLR of 8.95 per cent on one-year loans. The revised MCLRs on loans with two-year tenure is now 9.05 per cent.

Tenor	Existing MCLR	Revised MCLR
Overnight>	8.1%	8.2%
One month>	8.35%	8.45%
Three months>	8.4%	8.5%
Six months>	8.75%	8.85%
One year>	8.85%	8.95%
Two years>	8.95%	9.05%
Three years>	9%	9.1%

MCLR hikes by other PSUs

Not just the SBI, other PSU banks – including Bank of Baroda, Canara Bank, and UCO Bank – have also increased their MCLR or lending rates in different tenures, resulting in higher costs for consumer loans.
 

While the Bank of Baroda and Canara Bank revised MCLR from August 12, UCO Bank has increased the lending rate for specific tenures, effective August 10, 2024.