The State Bank of India (SBI) has announced a 10 basis points (0.1%) increase in its marginal cost of funds-based lending rate (MCLR) across all loan tenures, effective from June 15. This adjustment will lead to an increase in EMIs for borrowers whose loans are tied to MCLR. MCLR serves as the minimum interest rate that banks use to determine lending rates, reflecting changes in their borrowing costs. Introduced in 2016, MCLR plays a crucial role in determining the interest rates for various loan products offered by banks.
Under the revised rates, the one-year MCLR will rise to 8.75% from 8.65%, while the overnight MCLR will increase from 8.00% to 8.10%. Additionally, the one-month and three-month MCLR rates will climb to 8.30% from 8.20%.
The six-month MCLR has increased to 8.65% from the previous 8.55%, the two-year MCLR has risen to 8.85% from 8.75%, and the three-year MCLR is now 8.95%, up from 8.85%. Most retail loans, such as home and auto loans, are tied to the one-year MCLR rate.
SBI also announced that it has raised $100 million through bonds to support business growth. This follows the RBI’s Monetary Policy Committee (MPC) decision to keep the repo rate—the key policy rate—unchanged at 6.5% due to concerns over rising food inflation.