State Bank of India (SBI), the largest public sector bank in the country, has once again caught its millions of customers off guard. The bank has raised its marginal cost of lending rate by 5 basis points, effective from July 15, 2023. As per the official website of the bank, the revised MCLR ranges from 8% to 8.75% for different time periods. This hike in rates will result in an increased burden on customers availing home loans, car loans, education loans, personal loans, and more.
Impact on EMI for different tenures
Earlier, on March 15, 2023, SBI had already increased its benchmark prime lending rates (BPLR) by 70 basis points. The overnight MCLR has now risen from 7.95% to 8.00%, while the one-month MCLR has increased from 8.10% to 8.15%. Similarly, the three-month MCLR has climbed from 8.10% to 8.15%, the six-month MCLR has gone up from 8.40% to 8.45%, and the one-year MCLR has risen from 8.50% to 8.55%. The two-year MCLR has increased from 8.60% to 8.65%, and the three-year MCLR has reached 8.75% from 8.70%.
Interest rate hike despite stable repo rate
It's worth noting that the Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.50% for a considerable time due to controlled inflation. Despite this, banks have been consistently increasing their interest rates. Since May 2022, the RBI has raised the repo rate by a total of 2.25%, but following inflation control in June 2023, no changes were made to the repo rate. However, customers continue to bear the brunt of higher interest rates imposed by banks.
HDFC Bank's interest rate increase
Prior to SBI, the largest private sector bank in the country, HDFC Bank, also raised its interest rates. HDFC Bank implemented a 15% increase in its MCLR for selected loan durations, effective from July 7, 2023.
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