Country's biggest banksTaking loan from State Bank of India (SBI) has become expensive. The bank on Thursday announced an increase in its Marginal Cost of Funds Based Lending Rate (MCLR) by 0.05 percent. According to the bank's website, the one-year MCLR has been increased by 0.05 percent to nine percent from Friday. The one year MCLR rate decides the rate of loans like Personal Loan, Car Loan and Home Loan. The bank has increased MCLR twice recently. Bank Chairman C S Shetty said 42 per cent of the bank's loan segment is linked to MCLR, while the rest is based on external benchmarks. He also clarified that deposit rates in the banking system are at their highest level. SBI has also increased the MCLR of three and six months. There has been no change in MCLR for tenors of one day, one month, two years and three years.
The bank changed its interest rates
increase in interest rates
What is MCLR?
Marginal Cost of Funds Based Lending Rate (MCLR) is the minimum lending rate below which the bank is not allowed to give loans. Borrowers will have to wait longer for any reduction in high interest rates, as the Reserve Bank of India has decided to keep the repo rate unchanged at 6.5% in its recent meeting. This is the ninth consecutive meeting in which the central bank has maintained the current rate. Experts are not expecting a rate cut in the next meeting.
No hope of reducing repo rate
After the record surge in retail inflation, there is no possibility of a repo rate cut in the RBI monetary policy meeting to be held in December. Its effect is now visible. Banks are increasing interest rates. This will increase the EMI burden on lakhs of people. Many people have been waiting for a reduction in interest rates for a long time. However, this does not seem to be happening soon.
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