SBI's loan EMI may rise as lender hikes MCLR by up to 10 bps — Check latest interest rates

State Bank of India (SBI) on Friday, December 15 hiked the marginal cost of funds-based lending rate (MCLR) on select tenures by 5-10 basis points, making most consumer loans (like auto or home loans) costlier for borrowers. As per SBI's website, from December 15, MCLR on 1-year tenure is hiked to 8.65% from the previous 8.55%.

The change affects various other tenures as well, except for the overnight tenure which remains unchanged at 8.00%.

As mentioned, EMIs will get expensive for those who take loans against the MCLR.

There is a reset-period for MCLR based loans, after which the rates get revised for the borrower.

Along with SBI, other banks are also raising lending rates.

SBI Chairman, Dinesh Khara, speaking on CNBC-TV18, addressed the recent increase in lending rates, attributing it to the escalation in costs.

Khara mentioned a limited margin for further adjustments, indicating that the current 5-10 basis points hike adequately covers the increased costs incurred.

Contrary to concerns, Khara expressed confidence in loan growth, stating that the rise in lending rates won't impede the momentum. He emphasised that the present interest rates are at their peak, implying a likelihood of stability in the near future.

Additionally, Khara highlighted that SBI has no plans to escalate deposit rates.

The development comes after RBI Governor Shaktikanta Das-led monetary policy committee (MPC) on Friday, December 8, 2023, kept the repo rate unchanged for the fifth time at 6.5%.

However, the central bank earlier implemented six consecutive rate hikes, totalling 250 basis points, until the pause in April.