State Bank of India (SBI) and Bank of Baroda (BoB) have announced an increase in their Marginal Cost of Funds-based Lending Rate (MCLR) by 5-10 basis points (bps). This adjustment will take effect from July 16, 2024. The move aligns with broader monetary trends and is expected to impact borrowers with floating-rate loans, including home, auto, and personal loans.
Source:- news 18
For SBI, the one-year MCLR has been revised to 8.45%, an increase of 5 bps from the previous rate. Meanwhile, BoB has raised its one-year MCLR by 10 bps to 8.50%. This increase reflects the banks’ response to the rising cost of funds, driven by inflationary pressures and adjustments in the Reserve Bank of India’s (RBI) policy rates.
Source:- BBC news
These changes in MCLR are crucial for borrowers, as they directly influence the interest rates on new loans and existing loans with reset clauses. Borrowers with loans linked to the MCLR will see a slight increase in their EMIs, affecting their monthly budgets. The decision by these major banks indicates a cautious approach to managing liquidity and maintaining profitability amidst fluctuating economic conditions.
Overall, the hike in MCLR by SBI and BoB underscores the dynamic nature of the banking sector and its responsiveness to macroeconomic variables.
Share your views in the comments
