Independence day SBI gave customers a shock then loan got expensive know how much your remittance increased


New Delhi: There is no good news for clients of the country’s largest public bank, SBI. The bank again made the loan expensive. The bank increased the lending rate (MCLR) of the fund based on marginal cost by 20 basis points. The increased rates came into effect from today. The bank raised rates for the third time in three months. After this hike, the MCLR rate for a period of three months from overnight went from 7.15% to 7.35%. In this context, the six-month MCLR rate rose from 7.45% to 7.65%. The one- and two-year rates have now gone from 7.7% to 7.9% and the three-year rate has gone from 7.8% to 8%.

Previously, SBI also raised the MCLR rate by 10 basis points last month. Recently, RBI had raised the repo rate by 50 basis points to keep inflation under control. The repo rate has now risen to 5.40%. After the huge central bank repo rate hike, many banks made it expensive to borrow. A week ago, HDFC Bank had raised the MCLR by 5 to 10 basis points. This increase took effect on August 8. Similarly, IDFC First Bank also raised the lending rate by 5 to 15 basis points.

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Which customers will be affected
The biggest impact of this decision by the bank will be on customers who have taken out home, car or personal loans. This will increase their EMI in the months to come. According to data through December 2021, MCLR loans accounted for the highest share (53.1%) of the bank loan portfolio. According to bankers, the rise in the MCLR could continue as the rise in the repo rate has increased the cost of funds for banks. Banks review the cost of the loan each month and pass on the increased cost to customers.

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What is MCLR
The Reserve Bank of India (RBI) introduced the MCLR system in 2016. It is an internal benchmark for any financial institution. In the MCLR process, the minimum interest rate for the loan is fixed. The MCLR is the minimum interest rate at which a bank can lend. Simply put, Marginal Cost of Funds Based Lending Rates (MCLR) is a methodology established by the Reserve Bank of India used by commercial banks to set the interest rate on loans.

Source: navbharattimes.indiatimes.com

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