Top News

The country's largest public sector bank SBI has announced an increase in MCLR rates, making it more expensive to take a loan from the bank. The bank has announced an increase of 0.05% in the margin cost of fund-based lending rate (MCLR) in some periods. One-year MCLR, a key period to which long-term loans are linked, was increased to 9% on Friday.

The one-year MCLR rate determines the rate of loans like personal, vehicle, and housing. The bank has recently increased the MCLR twice. Bank chairman CS Shetty said that 42 percent of the bank's loan segment is linked to MCLR, while the rest is based on external benchmarks.

What did the SBI chairman say

He also clarified that deposit rates in the banking system are at their highest level. SBI has also increased the MCLR by three and six months. MCLR of one day, one month, two years and three years period has been maintained. SBI Chairman CS Shetty said that 42 percent of the bank's loan segment is linked to MCLR, while the rest of the loans are based on external benchmarks. SBI has also increased the MCLR for three and six months. However, there is no change in the MCLR for one month, two years, and 3 years.

The calculation for ₹30,000 EMI: A 5 bps increase generally increases the EMI by ₹15-₹25 per lakh of the loan principal, depending on the tenure and interest rate. For example, if the loan principal is ₹50 lakh, the EMI can increase by ₹750-₹1,250.

Earlier, SBI had increased the 'Marginal Cost of Funds-based Lending Rate' (MCLR) in August. The MCLR was 9.10 percent for three years and 9.05 percent for two years. This increase has been made despite RBI not making any changes in its policy rates.