The country's largest lender State Bank of India (SBI) has raised its benchmark marginal cost of lending rate (MCLR) by 5-10 basis points with effect from Monday (July 15).
Interest rates on loans linked to MCLR are also likely to go up following the hike. The rate on loans of one-month tenure has been hiked by 5 basis points to 8.35 per cent while the MCLR on loans of three-month tenure has been hiked by 10 basis points to 8.40 per cent. One basis point is 0.01 percentage point.
MCLR rates for the six-month, one-year and two-year tenures have been hiked by 10 basis points each to 8.75 per cent, 8.85 per cent and 8.95 per cent respectively.
The three-year MCLR has been hiked by 5 basis points to 9 per cent. All the rates are effective from July 15.
This is the second consecutive hike in rates by SBI after a 10 basis point hike announced in June.
MCLR is the minimum interest rate below which banks cannot lend. Mostly corporate loans are linked to MCLR while retail loans are usually linked to the repo rate which has been left untouched by the RBI since February 2023.
SBI is considered the bellwether and other banks often tend to follow its policies on interest rates. Consequently, the hike is likely to lead to an increase in the MCLR of other banks as well.
(With inputs from IANS)
