SBI hikes MCLR by 5 bps, EMIs to go up

The country's largest lender State Bank of India (SBI) has hiked the marginal cost of lending rate (MCLR) by 5 basis points across all loan tenures. One basis point is equivalent to one-hundredth part of a percentage point.

The hike has come in with effect from 10 December 2018. Post this hike, home, auto and other loans are most likely to become costlier.

SBI MCLR rates w.e.f 10 December 2018

Tenor	Existing MCLR (In %)	Revised MCLR (In %)
Over night	8.15	8.20
One Month	8.15	8.20
Three Month	8.20	8.25
Six Month	8.35	8.40
One Year	8.50	8.55
Two Years	8.60	8.65
Three Years	8.70	8.75

Source: SBI website

An overnight MCLR now stands at 8.20 percent. A three-month MCLR stands at 8.25 per cent whereas six month MCLR stands at 8.40 per cent. Similarly, MCLR for tenor of one year stands at 8.55 per cent, as per the SBI's website.

Along with the hike in MCLR, the bank has also hiked the benchmark prime lending rate (BPLR) and base rate to 13.80 per cent and 9.05 per cent, respectively - a hike of 5 bps in both the cases.

The decision has come after the Reserve Bank of India (RBI) has kept the key policy rates unchanged in the bi-monthly monetary policy held on December 5, 2018.

However, for existing borrowers, the hike in MCLR will be felt in their EMIs (equated monthly instalment) when the reset date of their home loan arrives.

Usually, the reset date of home loan between the bank and the borrower is of six months or one year as agreed in the loan agreement. The future EMIs (till the next reset date) will be calculated based on the MCLR rate plus margin, if any, effective on the reset date.