State Bank of India (SBI), the country’ largest state-run lender, increased interest rates on loans by 10 basis points across tenors. The Marginal Cost of Funds Based Lending Rate (MCLR) has been hiked by 10 basis points across tenors, with effect from August 15, 2024.
SBI’s new MCLR for three-years tenor now stands at 9.10% from 9% earlier, while overnight MCLR has been increased to 8.20% from 8.10%.
Here are SBI’s tenor-wise MCLR effective from 15th August, 2024:
| Tenor | Existing MCLR | Revised MCLR |
|---|---|---|
| Overnight | 8.10% | 8.20% |
| One Month | 8.35% | 8.45% |
| Three Month | 8.40% | 8.50% |
| Six Month | 8.75% | 8.85% |
| One Year | 8.85% | 8.95% |
| Two Years | 8.95% | 9.05% |
| Three Years | 9.00% | 9.10% |
The is the third consecutive month of 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.
MCLR is the minimum interest rate below which a bank cannot lend, except in certain cases allowed by the Reserve Bank of India (RBI). MCLR was introduced by the RBI in April 2016, replacing the earlier base rate system as a benchmark for lending rates.
Earlier, other PSU banks such as Bank of Baroda, Canara Bank, and UCO Bank increased their MCLR or lending rates in different tenures, resulting in higher costs for consumer loans.
Bank of Baroda and Canara Bank revised MCLR from August 12, while UCO Bank has increased the lending rate for specific tenures, effective August 10, 2024.
This came after the RBI on August 8 kept the benchmark repo rate unchanged at 6.5%. The Monetary Policy Committee (MPC) of the RBI kept the policy rates unchanged and maintained the status quo on policy stance as well.
The standing deposit facility (SDF) rate remains at 6.25%, and the marginal standing facility (MSF) rate and the bank rate will be at 6.75%.
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