The State Bank of India, India's largest government bank, has announced a hike in its lending rates by up to 10 basis points (0.1%) across selected tenures.
Effective from Thursday, i.e. August 15, the hike in lending rates will lead to higher Equated Monthly Installments (EMIs) for borrowers with loans linked to the Marginal Cost of Funds based Lending Rate (MCLR). The MCLR is referred to as the the minimum lending rate below which a bank is not allowed lend.
Here are the revised rates:
1. For an overnight period: Increased from 8.10% to 8.20%.
2. For one month: Increased from 8.35% to 8.45%.
3. For three months: Increased from 8.40% to 8.50%.
4. For a six-month period: Increased from 8.75% to 8.85%.
5. For two years: Increased from 8.95% to 9.05%
6. For a period of three years: Increased from 9.0% to 9.10%.
Notably, this is the third month this year to have witnessed a hike in the lending rates by the country's largest lender, SBI.
How does it impact the borrowers?
The increase in MCLR rates implies costly rates of home loans, car loans or education loans for the borrowers, as these mentioned loans are tied to MCLR rates. It may be noted that the borrowers who have taken the MCLR-linked loans will see the changes based on their loan reset periods, following which the revised rates will come into force.
RBI keeps repo rate unchanged for sixth consecutive time:
The Reserve Bank of India, for the sixth time in a row, has kept the repo rate unchanged. The repo rate refers to the rate at which the Central bank lends money to the commercial banks. Higher is the repo rate, higher the EMI will be and vice versa.
