SBI and HDFC Raise Lending Rates; EMIs May Get Costlier

Business

oi-Olga Robert

By Olga Robert

Published: Friday, June 1, 2018, 20:25 [IST]

The State Bank of India has said that it has increased its marginal cost base lending rates (MCLR) by 10 basis point. MCLR is the rate below which a bank cannot lend.

Its MCLR for one year now stands at 8.25 percent, up from 8.15 percent previously, as per its website. The new rates are applicable from June 1.

Tenure	Revised MCLR (%)	Previous MCLR (%)
Overnight	7.90	7.80
1 month	7.90	7.80
3 months	7.95	7.85
6 months	8.10	8.00
1 year	8.25	8.15
2 years	8.35	8.25
3 years	8.45	8.35

In March SBI had raised its MCLR by 25 bps. Unless a bank chooses to absorb its margin on profit, the hike could mean that EMIs (equal monthly installments) for existing borrowers would get costlier from an increase in interest rates.

The news comes in the same week SBI hiked interest rates on fixed deposits for selected tenures.

Housing Development Finance Corporation (HDFC) too has hiked its MCLR by 10 basis points, effective from June 2.