The country’s largest lender State Bank of India (SBI) has hiked its marginal cost of funds based lending rate (MCLR) by 10 basis points (bps) across tenures, effective May 15. This is the second time the state-owned lender has raised its MCLR in as many months.
Consequently, SBI’s overnight, one-month, three-month MCLR now stands at 6.85 per cent as against 6.75 per cent earlier. Similarly, the six-month MCLR stands at 7.15 per cent, one-year MCLR stands at 7.20 per cent, two-year MCLR stands at 7.40 per cent, and three-year MCLR stands at 7.50 per cent.
The hike in MCLR by SBI comes after the monetary policy committee (MPC) hiked benchmark interest rate (repo rate) by 40 basis points to 4.40 per cent, in an off-cycle meeting to tame the rising headline inflation.
Last month the state-owned lender had increased its MCLR by 10 bps before the MPC hiked its benchmark rate by 40 basis points. So, effectively, the lender has hiked its MCLR by 20 bps since April.
As of December 2021, a little over 39 per cent of banking system loans are linked to the external benchmark, shows Reserve Bank of India (RBI) data, with 58.2 per cent of the home loans linked to external benchmarks.
SBI has also increased interest rate on its bulk term deposits (Rs 2 crore and above) by 40 – 90 basis points, with effect from May 10.
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