The country’s largest lender, State Bank of India (SBI), has increased its marginal cost of funds-based lending rate (MCLR), by 20 basis points across all tenors up to three years, effective September 1, 2018. Now SBI’s overnight and one-month tenors’ MCLR stands at 8.1 per cent, as against 7.9 per cent, as per the SBI’s website.
See also: RBI hikes interest rate by 0.25 per cent on inflationary concerns
The MCLR for a one-year tenor increased to 8.45 per cent from 8.25 per cent earlier. Most of the retail loans are benchmarked against one-year MCLR.
In case of ICICI Bank, the one-year MCLR was increased by 0.15 per cent to 8.55 per cent, a bank statement said.
The MCLR for a three-year tenor of SBI increased to 8.65 per cent from 8.45 per cent. Both the banks had last revised their MCLR in June 2018, just before the second bi-monthly monetary policy review.
The rate hike by the banks, comes a month after the Reserve Bank of India (RBI) hiked its benchmark lending rate, called repo rate, by 25 basis points to 6.5 per cent. The RBI had last raised the repo rate on June 6, 2018, by 0.25 per cent to 6.25 per cent. That increase was the first since January 28, 2014, when rates were hiked by a similar proportion, to eight per cent.
