Borrowers will need to pay more towards EMIs as State Bank of India (SBI), the country’s largest lender, has raised its marginal cost of funds-based lending rate (MCLR) by 5 basis points (bps) across all tenures.

The revised MCLR is effective from 15 July.

With this, borrowers who have availed loans on MCLR will have to pay according to the new rates. This does not apply to those loans which are linked to other benchmarks.

As per the information posted on the SBI website, the MCLR-based rates will now vary between 8% and 8.75%. 

The last time SBI raised the benchmark prime lending rate (BPLR) was on 15 March. That time the state-owned lender had increased the rate by 70 basis points.

MCLR represents the minimum rate at which the bank can offer loans to consumers. 

The one-year MCLR has now increased to 8.55%, from the earlier 8.50%. Most of the loans are linked to the one-year MCLR rate.

An overnight, one-month and three-month MCLR rose by 5 bps to 8% and 8.15%, respectively, whereas a six-month MCLR increased to 8.45%.

Two-year MCLR also increased by 5 bps to 8.65%, while three-year MCLR rose to 8.75%.

The Reserve Bank of India (RBI) paused on interest-rate hikes for the second time in a row, in its June monetary policy. Since May 2022, the central bank had been hiking rates to lift the repo rate by 250 bps to 6.50%. 

The repo rate is the rate at which the RBI lends short-term funds to commercial banks.