SBI Hikes Loan Interest Rate 2024, June, MCLR Hike, Fixed Deposits & More

SBI Hikes Loan Interest Rate 2024:- In 2024, State Bank of India (SBI) has announced an increase in its loan interest rates, marking a significant adjustment in its lending policies. Effective from a specified date, the bank’s decision impacts various loan products, including home loans and vehicle loans, which will now incur higher costs for borrowers. This move by SBI reflects broader economic trends and aims to align its lending rates with current market conditions. Customers and financial analysts alike are closely monitoring these developments, assessing their implications on borrowing costs and consumer spending in the coming months.

SBI Hikes Loan 2024 Interest Rate

India’s largest public sector bank, State Bank of India, has raised the marginal cost of funds based lending rates on certain loan terms by 10 basis points. These new rates, effective from June 15, 2024, will result in higher costs for popular consumer loan products like home loans and vehicle loans. This article explores the implications of these updated interest rates and related developments in detail.

SBI Hikes Loan Interest Rate

State Bank of India offers attractive interest rates on home loans starting at 8.50% per annum. The loan tenure can extend up to 30 years, providing a comfortable repayment period. The processing fee for these loans is 0.35% of the loan amount (with a minimum of Rs. 2,000 and a maximum of Rs. 10,000), plus applicable taxes. Women borrowers benefit from an additional interest concession of 0.05% on SBI Home Loans. With no hidden charges and a complete waiver of prepayment charges, these loans are among the most preferred housing loan products in the country.

Hike Loan Interest Rate Overview

BankState Bank of India (SBI)
Effective DateFrom June 15, 2024
Type of LoansHome loans, Vehicle loans, and other consumer loans
Interest Rate ChangeIncreased by 10 basis points
New Interest RatesAdjusted based on marginal cost of funds
Impact on BorrowersHigher borrowing costs
Reason for ChangeAligning with current market conditions
CategoryTrending

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SBI Hikes Loan Interest Rate in June 2024

State Bank of India (SBI) has implemented significant changes affecting its lending and deposit products in June 2024.

Marginal Cost of Funds Based Lending Rates (MCLR) Hike

  • Increase in Rates: SBI raised its MCLR across various tenors, impacting borrowing costs for consumers.
  • Effective Date: Changes took effect from June 15, 2024.
  • Example Changes:
    • Overnight: Increased from 8.00% to 8.10%
    • One Year: Increased from 8.65% to 8.75%

External Benchmark Lending Rate (EBLR) Stability

  • Unchanged Rate: SBI’s EBLR remains steady at 9.15%, linked to the Repo Rate and a fixed spread.
  • Applicability: EBLR affects specific loan products, such as home loans.

Fixed Deposits (FD) Interest Rates Update

  • Revised Rates: SBI adjusted FD rates for both general public and senior citizens.
  • Tenor-based Rates: Rates vary across different tenors, offering competitive returns.
  • Example Rates:
    • 1 Year to less than 2 Years: 6.8% for general public, 7.3% for senior citizens
    • 5 Years and up to 10 Years: 6.5% for general public, 7.5% for senior citizens

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New MCLR Rates in SBI

Below is the table showing the revised Marginal Cost of Funds Based Lending Rates (MCLR) by State Bank of India (SBI) after an increase of 10 basis points:

TenorExisting MCLR (%)Revised MCLR (%)
Overnight8.008.10
One Month8.208.30
Three Months8.208.30
Six Months8.558.65
One Year8.658.75
Two Years8.758.85
Three Years8.858.95

Understanding MCLR (Marginal Cost of Funds Based Lending Rate)

MCLR is a reference rate set by the Reserve Bank of India (RBI) for banks to determine their lending rates, ensuring transparency and fairness in lending practices. Banks are not permitted to lend below the MCLR.

SBI EBLR (External Benchmark Lending Rate)

SBI’s External Benchmark Lending Rate remains unchanged at 9.15%, calculated as Repo Rate (6.50%) + Spread (2.65%). Home loans in SBI are linked to EBLR, indicating no change in rates for these products.

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SBI Base Rate

SBI’s Base Rate stands at 10.40% effective from June 15, 2023.

Latest SBI FD Interest Rates (Below Rs 3 Crore)

TenorsRevised Rates for Public (%)Revised Rates for Senior Citizens (%)
7 days to 45 days3.54
46 days to 179 days5.56
180 days to 210 days6.256.75
211 days to less than 1 year6.57
1 year to less than 2 years6.87.3
2 years to less than 3 years77.5
3 years to less than 5 years6.757.25
5 years and up to 10 years6.57.5*

Conclusion

State Bank of India’s decision to hike loan interest rates and adjust Fixed Deposit (FD) rates in June 2024 reflects its proactive approach to aligning with current economic conditions and regulatory requirements. The increase in Marginal Cost of Funds Based Lending Rates (MCLR) signals higher borrowing costs for consumers across various loan products, effective from June 15, 2024. Meanwhile, SBI’s External Benchmark Lending Rate (EBLR) remains stable, ensuring continuity for specific loan offerings like home loans.

For depositors, SBI has revised FD rates, offering competitive returns tailored to different tenors and customer segments. These strategic adjustments by SBI are aimed at balancing the needs of borrowers and depositors while maintaining its market position as a leader in India’s banking sector. As consumers navigate these changes, understanding the implications on loan affordability and investment returns will be crucial in making informed financial decisions.

FAQ’S

What changes has State Bank of India (SBI) made to its loan interest rates in June 2024?

State Bank of India has increased its Marginal Cost of Funds Based Lending Rates (MCLR) across various tenors, resulting in higher borrowing costs for consumers. The changes took effect from June 15, 2024.

How does the MCLR hike affect borrowers?

The MCLR hike means that borrowers will pay higher interest rates on their loans with SBI, impacting the cost of borrowing for home loans, vehicle loans, and other consumer loans.

What is the External Benchmark Lending Rate (EBLR) and how does it relate to these changes?

SBI's EBLR remains unchanged at 9.15%, linked to the Repo Rate and a fixed spread. It affects specific loan products like home loans, providing stability in interest rates for these categories.

What adjustments have been made to SBI's Fixed Deposit (FD) interest rates?

SBI has revised its FD interest rates for both general public and senior citizens across various tenors. The rates vary depending on the duration of the deposit, offering competitive returns to depositors.

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