July 15th 2024.
SBI, the largest lender in the country, has recently announced a change in their benchmark marginal cost of lending rate. This adjustment will take effect starting Monday and is expected to have an impact on interest rates for loans tied to the MCLR. It's important to note that this increase is between 5-10 basis points, with each basis point representing a 0.01 percentage point.
The new rates will vary based on the loan tenure. For instance, loans with a one-month tenure will experience a 5 basis point hike, bringing the MCLR to 8.35%. On the other hand, loans with a three-month tenure will see a 10 basis point increase, bringing the MCLR to 8.40%. This trend continues for loans with six-month, one-year, and two-year tenures, with each experiencing a 10 basis point hike. As for loans with a three-year tenure, the MCLR will see a 5 basis point increase, bringing it to 9%.
All of these changes will take effect starting July 15th, making it the second consecutive month that SBI has increased their rates. This follows a 10 basis point hike that was announced in June. It's worth noting that the MCLR is the minimum interest rate at which banks can lend, with corporate loans often being linked to it. On the other hand, retail loans are typically tied to the repo rate, which has remained unchanged by the RBI since February 2023.
As the bellwether for the banking industry, SBI's policies on interest rates are often emulated by other banks. Therefore, it's likely that this recent hike will result in an increase in MCLR rates for other banks as well. This could have a significant impact on borrowers, especially those with loans tied to the MCLR. Stay tuned for further updates on the evolving interest rate landscape in India.
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