The middle-class man’s struggle to own a house and a vehicle may get tougher as home, auto and other loans is set to become costlier as India’s largest lender SBI on Saturday raised its benchmark lending rates or MCLR by 0.2 per cent. The State Bank of India has hiked the lending rate, effective by September 1, by 20 basis points across all tenors up to three years. Other lenders also have raised the rate.
At present, SBI's overnight and one-month tenors' Marginal Cost of Funds Based Lending Rate (MCLR) stands at 8.1 per cent as against 7.9 per cent, as per the SBI's website.
The MCLR for a one-year tenor rose to 8.45 per cent from 8.25 per cent earlier. Most of the retail loans are benchmarked against one-year MCLR. The MCLR for a three-year tenor increased to 8.65 per cent from 8.45 per cent.
The rate hike by bank comes a month after the Reserve Bank of India (RBI) hiked benchmark lending rate called repo rate by 25 basis points to 6.5 per cent.
RBI had last raised the repo rate on June 6 by 0.25 per cent to 6.25 per cent. That increase was the first since January 28, 2014 when rates were hiked by a similar proportion to 8 per cent.
(With PTI inputs)