SBI Interest Rates: The country’s largest public sector bank, State Bank of India (SBI), has announced a 10 basis point (bps) rise in the marginal cost of funds-based lending rate (MCLR) on certain tenures. Due to this action, borrowers will pay more for the majority of consumer loans, including home and auto loans. The modifications will take effect on June 15, 2024.
Understanding MCLR
A bank cannot lend money below a minimal interest rate known as the Marginal Cost of Funds-based Lending Rate, or MCLR. This rate is important since it has a direct effect on the interest rates charged on different kinds of loans.
Revised MCLR Rates
From June 15, 2024, the revised MCLR rates for SBI are as follows:
| Tenure | Existing MCLR (%) | Revised MCLR (%) |
|---|---|---|
| Overnight | 8.00 | 8.10 |
| One Month | 8.20 | 8.30 |
| Three Months | 8.20 | 8.30 |
| Six Months | 8.45 | 8.55 |
| One Year | 8.65 | 8.75 |
| Two Years | 8.75 | 8.85 |
| Three Years | 8.85 | 8.95 |
Impact on Loans
Auto Loans
Auto loans from SBI are based on the one-year MCLR, which was raised from 8.65% to 8.75%. Due to this increase, auto loans will be more expensive for borrowers.
Personal Loans
SBI personal loans are correlated with the two-year MCLR. Borrowers of personal loans now pay more in interest due to the increase in the rate from 8.75% to 8.85%.
External Benchmark Lending Rates (EBLR)
SBI’s external benchmark lending rates (EBLR) are still at 9.15%, which is the total of the Repo Rate (6.50%) plus a 2.65% spread, even though the MCLR has increased. Home loan interest rates range from 8.50% to 9.65% based on the borrower’s CIBIL score, and all home loans are connected to the EBLR. For residential loans, the processing charge is 0.35% of the loan amount, with a minimum of Rs. 2,000 and a maximum of Rs. 10,000, exclusive of relevant GST.
Revised Fixed Deposit (FD) Interest Rates
SBI has also revised its fixed deposit interest rates for amounts below Rs. 3 crore. The new rates, effective from June 15, 2024, are as follows:
| Tenor | General Public (%) | Senior Citizen (%) |
|---|---|---|
| 7 days to 45 days | 3.50 | 4.00 |
| 46 days to 179 days | 5.50 | 6.00 |
| 180 days to 210 days | 6.25 | 6.75 |
| 211 days to less than 1 year | 6.50 | 7.00 |
| 1 year to less than 2 years | 6.80 | 7.30 |
| 2 years to less than 3 years | 7.00 | 7.50 |
| 3 years to less than 5 years | 6.75 | 7.25 |
| 5 years and up to 10 years | 6.50 | 7.50 |
These adjustments to interest rates are intended to modify borrowing costs and are indicative of the general condition of the economy. For improved financial planning, depositors and borrowers should be aware of these modifications.
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