SBI increases home loan interest rates, SBI personal loan interest rate, sbi auto loan, sbi auto loan

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SBI hikes mortgage interest rates; NDEs expected to increase

SBI home loan interest rate: The State Bank of India, the country’s largest lender, raised lending rates following the Reserve Bank of India’s (RBI) repo rate hike last week. The central bank had raised the repo rate by 0.50% to 4.90%.

The public sector bank has revised the marginal cost of funds-based lending rates (MCLR) up to 0.20% with effect from June 15, a move that will increase EMIs for home, auto and personal loans.

The one-year benchmark MCLR has been revised upwards to 7.40% from the current rate of 7.20%. The MCLR from one day to three years has been increased to 7.05-7.70%.

The SBI also raised the repo-linked lending rate (RLLR) effective June 15. The revised RLLR will be 7.15% plus the credit risk premium (CRP), compared to 6.65% plus the CRP.

Most consumer loans such as auto, home, and personal loans are tied to MCLR. The MCLR system came into effect on April 1, 2016, moving from the old framework, for better transmission of interest rates to customers.

From October 1, 2019, all banks must lend only at an interest rate linked to an external benchmark such as the RBI repo rate or Treasury bill yield. As a result, the transmission of monetary policy through banks has gained ground.

A number of banks raised rates following the RBI repo rate review on June 8.

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Bernadine J. Perkins