The country's largest lender, the State Bank of India (SBI) has hiked the key lending rate also known as the marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps) across all tenors. The new rates will be applicable with effect from February 15, 2023. The development comes days after the Reserve Bank of India (RBI) hiked the key lending rates by 25 bps to 6.50%.
The MCLR is the minimum interest rate that any financial institutions such as banks need to charge for a specific loan and dictates a lower limit of the interest rate for a loan. With an increase in MCLR, consumer loan rates such as auto loan, car loan, and home loan among others, are likely to go up.
SBI’s revised lending rates
According to SBI’s website, the overnight MCLR has been hiked from 7.85% to 7.95%. The revised one-month MCLR stands at 8.10% from 8% earlier. The MCLR for a three-month tenor stands at 8.10% from 8%. The MCLR for a six-month tenor has been revised to 8.40% from the previous 8.30%. The MCLR for a tenor of one year has been revised to 8.5% from 8.4%, whereas the MCLR for a tenor for two years has been hiked to 8.6% from the previous 8.5%. The MCLR for tenor for three years has been hiked to 8.7% to 8.6%.
MCLR of HDFC, PNB and BoB
Apart from this, HDFC Bank, the country’s largest private sector lender has hiked the MCLR rate by 10 bps across all tenors with effect from February 7. As per the bank’s website, the overnight MCLR stands at 8.6%, whereas the MCLR for tenors of one-month, three-month, and six months stand at 8.6%, 8.65%, and 8.75%, respectively. Meanwhile, the MCLR for the tenors of one year, two years and three years has been revised to 8.9%, 9% and 9.10%, respectively.
Punjab National Bank (PNB) has increased the repo-linked lending rate (RLLR) by 25 basis points from 8.75% to 9% with effect from February 9, 2023. Bank of Baroda has increased MCLR by 5 bps across all tenors with effect from February 9.
A revision in MCLR by leading lenders of the country is a consequence of an increase in the key repo rates by RBI earlier this month. While withdrawing the “accommodative stance” to tame high inflation in the country, the central bank hiked the key repo rate for the sixth time in a row to 6.50%. The standing deposit facility rate has been revised to 6.25% from 6% earlier, whereas the marginal standing facility and bank rate have been hiked 25 basis points to 6.75%.
