SBI slashes MCLR on one tenure to 8.20%

India’s largest lender State Bank of India (SBI) has reduced interest for one MCLR (marginal cost of funds-based lending rate) tenure by 25 basis points (bps) while maintaining the rates for other tenures, according to the latest MCLR for loans released by SBI. Applicable from October 15 to November 15, 2024, the revised MCLR will take effect on October 15, 2024.

The adjusted MCLR rates now range from 8.20% to 9.1%. The overnight MCLR is set at 8.20%, and the one-month MCLR has been reduced from 8.45% to 8.20%, marking a 25 bps decrease.

The three-month MCLR remains at 8.50%, the six-month MCLR remains at 8.85%, while the one-year MCLR is now 8.95%. The two-year and three-year MCLRs are fixed at 9.05% and 9.1%, respectively.

The MCLR represents the minimum rate below which a bank cannot lend.

SBI's base rate, effective since September 15, 2024, stands at 10.40%. Meanwhile, the benchmark prime lending rate (BPLR) has been updated to 15.15% per annum from the same date.

For home loans, SBI’s external benchmark lending rate (EBLR) is set at 9.15%, based on the RBI's repo rate of 6.50% plus a spread of 2.65%. Home loan interest rates vary between 8.50% and 9.65%, depending on the borrower’s CIBIL score.

Any change in the benchmark rate (REPO) will result in a corresponding adjustment to the interest rate on home and home-related loan accounts, as stated on the SBI home loan website. If the repo rate increases, the interest rate on these loans will rise as well. To counter the impact of the higher interest rate, customers have several options such as they can make a lump sum payment to maintain their current EMI and loan tenor, extend the loan tenor within permissible limits, raise the EMI to repay the loan within the existing tenor, or opt for a combination of these choices.

Recently, it was reported that SBI is planning to raise the current threshold of ₹5 crore under its instant loan scheme to improve easy and sufficient credit access for the MSME sector. The 'MSME Sahaj - End to End Digital Invoice Financing' scheme offers a seamless process for applying, documenting, and disbursing loans, with approval and disbursement completed within 15 minutes, all without manual intervention.

As of March 2024, SBI operates a network of 22,542 branches throughout the country.