 "Loan EMIs to rise! SBI hikes MCLR by up to 10 basis points")
State Bank of India (SBI) has raised its marginal cost of funds-based lending rate (MCLR) by up to 10 basis points for selected tenures. The latest hike by the state-owned lender will be effective from December 15, 2023, and is expected to raise EMIs on loans linked to MCLR.
Introduced in 2016, MCLR (Marginal Cost of Funds-Based Lending Rate) is a benchmark interest rate banks use to set minimum lending rates for loan products such as home loans, car loans, and personal loans. Banks cannot lend below the MCLR for any loan duration. MCLR replaced the earlier base rate system, providing a more dynamic mechanism for setting lending rates based on changes in the cost of funds for banks.
According to the SBI website, only the overnight rate has remained unchanged. As of December 15, the MCLR for the one-year tenure has been raised to 8.65 per cent, up from 8.55 per cent. Similarly, the two-year and three-year MCLR have also been increased by 10 basis points to 8.75 per cent and 8.85 per cent, respectively.
The lending rates for one month, three months, and six months have been raised by five basis points. Here is a table of all the revised rates:
| Tenor | Existing MCLR | Revised MCLR |
| Overnight | 8% | 8% |
| One Month | 8.15% | 8.20% |
| Three Months | 8.15% | 8.20% |
| Six Months | 8.45% | 8.55% |
| One Year | 8.55% | 8.65% |
| Two Years | 8.65% | 8.75% |
| Three Years | 8.75% | 8.85% |
In the last few months, many lenders have raised their MCLR. Ahead of the Reserve Bank of India (RBI) monetary policy decision, on December 7, HDFC Bank increased its MCLR across select tenors by five basis points. ICICI Bank and Bank of India also increased its MCLR by five basis points in November.
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