SBI hikes home loan interest rates; EMIs set to go up
SBI Home Loan Interest Rate: State Bank of India, the country's largest lender, has hiked the lending rates following the Reserve Bank of India's (RBI) repo rate hike last week. The central bank had hiked the repo rate by 0.50 per cent to 4.90 per cent.
The public sector bank has revised by up to 0.20 per cent the marginal cost of fund based lending rates (MCLR) with effect from June 15, a move that will increase home, auto and personal loan EMIs.
The benchmark one-year MCLR has been revised upwards to 7.40 per cent from the existing rate of 7.20 per cent. The overnight to three-year tenor MCLRs has been raised to 7.05-7.70 per cent.
SBI has also raised the repo linked lending rate (RLLR) with effect from June 15. The revised RLLR will be 7.15 per cent plus credit risk premium (CRP), as against the existing 6.65 per cent plus CRP.
Most consumer loans such as auto, home and personal loans are linked to MCLR. The MCLR system came into effect on April 1, 2016, shifting from the older framework, for better transmission of interest rates to customers.
From October 1, 2019, all banks have to lend only at an interest rate linked to an external benchmark such as RBI's repo rate or treasury bill yield. As a result, monetary policy transmission by banks has gained traction.
A number of banks have raised rates following RBI's repo rate revision on June 8.
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