The country’s largest bank has given a jolt, taking a loan from SBI has become expensive… Quickly check how much the EMI has increased?

The country’s largest bank has given a jolt, taking a loan from SBI has become expensive… Quickly check how much the EMI has increased?

SBI Hikes MCLR: Borrowing from State Bank of India has become costlier. After the RBI’s hike in repo rate, SBI has now announced a hike in its lending rates by 10 basis points or 0.10 percent. The new rates have come into effect from February 15, 2023.

SBI has shocked its customers.

The bank has increased its loan rate or marginal cost of lending rate (MCLR). After this, taking a loan from SBI will become more expensive and more money will have to be spent on EMI. After the Reserve Bank of India (RBI Repo Rate Hike) increased the repo rate, the country’s largest bank has also entered the list of banks that have made loans more expensive.

RBI had increased the repo rate in the past

To control the high level of inflation in the year 2022, the Reserve Bank of India had increased the policy rate (repo rate) five times in a row. Although these strict measures of the RBI have increased the burden on the people, the inflation rate has come within the prescribed limits. However, after inflation came under control, the Reserve Bank did not change its stance and announced to increase the repo rate once again in the first MPC meet of this year.

This time the repo rate was increased by 25 basis points or 0.25 percent and with it the repo rate increased to 6.50 percent. Like every time, after the increase in the repo rate, there is also a fear of increasing the loan rates by all the banks.

MCLR hiked by 10 basis points

After the RBI hiked the repo rate, many banks have made their loans more expensive. Now the name of State Bank of India (SBI) has also been added to this list. According to the SBI website, SBI has increased the MCLR by 10 basis points. After this decision, all types of loans including home loans, car loans, education loans or personal loans have become more expensive and EMIs have increased. Please be informed here that the revised loan rates have come into effect from Wednesday, February 15, 2023. According to the change in SBI’s loan rates after the recent increase, the MLCR for overnight loans has increased from 7.85 percent to 7.95 percent.

The new rates after the change are as follows

SBI has increased the MCLR for one month loan from 8.00 percent to 8.10 percent, for 3 months to 8.10 percent, for 6 months to 8.40 percent from 8.30 percent. At the same time, the rate for one year loan has been increased from 8.40 percent to 8.50 percent. Most of the loans are linked to this one-year MCLR. According to the new rates, the bank has increased the two-year MLCR from 8.50 percent to 8.60 percent, while for three years it has been decided to increase it from 8.60 to 8.70 percent.

SBI is not the only one in the list of banks that has made its loans expensive

Earlier, many banks had increased the MCLR immediately after the RBI increased the repo rate. Punjab National Bank (PNB) has increased the Repo Linked Lending Rate (RLLR) by 25 basis points from 9 percent to 9.25 percent. Its rates are effective from February 9, 2023. Apart from this, Bank of Baroda (BOB) has increased MCLR by 5 basis points from February 12. Bank of Maharashtra increased loan rates on February 13. On the other hand, HDFC has implemented new rates by increasing MCLR by 0.10 percent from February 7.

This is how EMI increases when MCLR increases

Marginal Cost Lending Rates or MCLR is actually a benchmark implemented by RBI, based on which all banks decide their interest rates for loans. While the repo rate is the rate at which RBI lends to banks.

Due to the decrease in repo rate, banks get loans cheaper and they reduce the EMI of the loan by reducing MCLR. On the other hand, when the repo rate increases, banks get expensive loans from RBI, due to which they have to decide to increase MCLR and the burden on the customers increases.

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