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    SBI Rate Hike: SBI has made the loan costlier again, know which customers’ EMI will increase

    Shehnaz AliBy Updated:No Comments3 Mins Read
    New Delhi: The country’s largest public sector bank SBI has once again made the loan costlier. The bank has increased its Base Rate and Benchmark Prime Lending Rate (BPLR). The increased rates will be applicable from tomorrow i.e. March 15. The bank revises its Base Rate and BPLR on a quarterly basis. According to the bank’s website, both BPLR and base rate have been increased by 0.70 per cent ie 70 basis points. From March 15, the bank’s BPLR will increase from 14.15 percent to 14.85 percent. Similarly, the base rate has also increased from 9.40 per cent to 10.10 per cent. The increase in Base Rate and BPLR will have a direct impact on the pockets of the customers. This will make loans costlier. That means their loan installment (EMI) will increase.

    Base rate and BPLR are the old benchmarks of the bank based on which the bank gives loans to the people. New loans are given on the basis of External Benchmark Based Lending Rate (EBLR) or Repo Rate Linked Rate (RLLR). An increase in Base Rate and BPLR will increase the installment for those whose loans are linked to these benchmarks. BPLR was calculated on the basis of average cost of funds. There was a lack of transparency in this. This is the reason why RBI had brought the base rate in the year 2010. Base rate is the minimum interest rate at which banks can give loans. Loan cannot be given at a rate below this. In April 2016, RBI introduced Marginal Cost of Funds Based (MCLR) instead of Base Rate.

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    MCLR is an internal benchmark for a financial institution. The minimum interest rate for the loan is fixed in the MCLR process. MCLR is the minimum interest rate at which a bank can offer a loan. The country’s largest bank SBI has once again made the loan (SBI interest rate) expensive. SBI recently increased the MCLR by 0.10 per cent for all tenures. The bank has increased MCLR twice this year. RBI had recently increased the repo rate for the sixth time. After this, many banks have made the loan expensive.

    Source: navbharattimes.indiatimes.com

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    Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

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