SBI customers: MCLR hike again means higher EMIs

In the midst of interest rate hikes, SBI has increased its marginal cost of lending rate as well. The rate hike will then be cumbersome for borrowers, resulting in higher EMIs.

MCLRs for overnight, one-month, and three-month have increased from 7.05% to 7.15%, according to the bank’s web site. Additionally, the MCLR on a six-month tenure has been increased to 7.45% from 7.35%. As a result, the one-year MCLR rate has been raised from 7.4% to 7.5%.

Rate hikes in the economy generally occur via repo rate hikes, which are the rates at which central banks lend money to commercial banks. This results in more spontaneous passing on of interest when it comes to loans rather than deposits.

For the second time in a month, the lender has raised this rate. June 15, 2022 was the last time the rates were revised.

Under the MCLR rate, banks are not allowed to extend loans below this level.