MCLR hike may not be sufficient for banks; SBI stock rises 1.1%

Credit growth, ability to pass on further increase in cost of funds are key: Experts

The stock of State Bank of India (SBI) was up 1.1 per cent intra-day due to the 20 basis points hike in marginal cost of funds-based lending rate (MCLR) from September 1. 

The hike, which was decided upon due to rising cost of funds and the hardening of policy rates, was not limited to India’s largest bank. 

Other banks such as ICICI Bank and Axis Bank, too, increased their MCLR. 

Though the rise in MCLR should add to the topline and profitability of banks, there are couple of factors that would impact this, say experts.

The new MCLR will, according