SBI MCLR: SBI has recently increased the MCLR for the second time. However, the bank has not made any change in MCLR for overnight, one month, two years and three years period. The interest rates in these periods will remain the same as before. The bank has increased the MCLR twice in the last few days. The bank’s chairman C S Shetty said that 42 percent of the bank’s loan segment is linked to MCLR, while the rest is based on external benchmarks. He also clarified that deposit rates in the banking system are at their highest level.
SBI has increased the MCLR by 5 basis points in 3 tenure interest rates, in which the interest rate on 3 months loan has been reduced from 8.50 to 8.55 per cent and the interest rate on 6 months loan has been increased from 8.85 to 8.90 per cent. At the same time, the interest rate on one year loan has been increased from 8.95 per cent to 9 per cent. HDFC Bank also hiked interest rates in September. The bank had increased the MCLR. Which is applicable on loans with overnight, one month and 3 months duration.
RBI replaced the base rate system
MCLR is the minimum interest rate at which banks lend i.e. loans. No bank can give a home loan, personal loan or car loan to any person at less than this interest rate. In the year 2016, RBI replaced the base rate system with this system. However, those who took loans before 2016 are still subject to BPLR. If the bank increases the MCLR rate. So automatically the EMI of the loan increases. Apart from this, MCLR is also related to the repo rate of banks. Therefore, if there is some change in the MCLR rate, it may directly affect the home loan interest rate.
What is MCLR?
MCLR is a rate that is decided by the bank. This rate is based on the additional cost that the bank has to incur to borrow an additional rupee. Based on this rate, banks offer different types of loans to their customers such as home loans, car loans and personal loans etc.