mclr: Sbi Hikes Mclr, old home loans become more expensive | Bombay News

Mumbai: Legacy home loans and some business loans have become more expensive, with the SBI raising its marginal cost of lending rate (MCLR) by 10 basis points (100 basis points = 1 percentage point) for the second month in a row . The MCLR is the benchmark for certain categories of business loans and home loans taken out before October 2019.

According to bankers, the MCLR will continue to rise as the rise in the repo rate has pushed up the cost of funds for banks. These higher costs are passed on to borrowers by revising the marginal cost of lending each month.
Announcing the results on Friday, SBI Chairman Dinesh Khara said the rate hike would be positive for the bank’s margins as most loans are subject to floating rates, meaning they are revised. almost immediately when interest rates rise. Yields on term deposits are fixed for the term of the deposits, and the deposits are revalued at maturity. This is why banks see an improvement in margins when rates rise and vice versa.
Following the Sunday May 5 announcement, SBI’s one-year MCLR was raised to 7.2% from 7.10%. The MCLR for two years was raised to 7.4% from 7.3%, while for three years the benchmark was raised to 7.5% from 7.4%. The MCLR for six months goes from 7.05% to 7.15%. The MCLR is increased to 6.85% each over three months, one month and one night occupancy, from the previous 6.75%.

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