SBI Hikes MCLR: Brace for Potentially Higher EMIs on Home and Auto Loans

State Bank of India (SBI), the country's largest lender, has raised its marginal cost of funds-based lending rate (MCLR) on various durations by 5-10 basis points (bps), a move that could translate to increased EMIs for auto and home loans.

Key Points:

• SBI's MCLR hike comes despite the Reserve Bank of India (RBI) maintaining the repo rate at 6.5%.

• New rates range from 8.20% for a one-month tenure to 8.85% for a three-year tenure.

• SBI chairman Dinesh Kumar Khara assures limited scope for further MCLR hikes, but other banks could follow suit.

• Factors like credit-to-deposit ratio and growth requirements will influence individual bank decisions.

Impact on Borrowers:

• Existing borrowers may not see immediate changes, but new loans will reflect the higher MCLR rates.

• Increased EMIs could strain budgets, particularly for those with variable-rate loans.

• Careful financial planning and exploring fixed-rate loan options may be advisable.

Outlook:

• The overall cost of borrowing is likely to remain elevated in the near term.

• Monitoring future RBI actions and individual bank policies is crucial for loan applicants.

Remember: This is just a summary. For detailed information and personalized advice, consult with a financial advisor.