SBI hikes MCLR by this much; PSBs increase FD interest rates ahead of festive season

SBI has raised its marginal cost of lending rate (MCLR) on loans by 20 basis points or 0.2 per cent.

SBI hikes MCLR by this much; PSBs increase FD interest rates ahead of festive season
State Bank of India has also hiked external benchmark-based lending rate (EBLR) with effect from 15th August 2022.

SBI has raised its marginal cost of lending rate (MCLR) on loans by 20 basis points or 0.2 per cent. The higher MCLR is effective from August 15, 2022. Loans linked to an external benchmark (EBLR) and repo linked (RLLR) have also been hiked. According to the public sector lender’s website, the one-year MCLR rate has increased to 7.70 per cent. The rates for overnight, one month and three months have been increased from  to 7.35 per cent. MCLR for a six-month term has been increased to 7.65 per cent from 7.45 per cent earlier. Rates for the two-year and three-year MCLR have been hiked to 7.90 per cent and 8 per cent, respectively.

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State Bank of India has also hiked external benchmark-based lending rate (EBLR) with effect from 15th August 2022. The rates have been hiked to 8.05 per cent + credit risk premium (CRP) + BSP. EBLR is a combination of repo rate plus a spread plus a credit risk premium which is based on one’s credit score. The banks repo linked lending rate (RLLR) has also been increased to 7.65%+CRP. Note that many banks including ICICI Bank, Bank of Baroda, PNB, HDFC Bank already hiked their MCLR soon after the Reserve Bank of India (RBI) repo rate hike.

FD rates hiked ahead of festive season

Meanwhile, several lenders in India have raised their deposit rates ahead of the festive season to fund the demands for loans. This hike in deposit rates is also in line with the RBI Monetary Policy Committee (MPC) stance in the last three policy meetings. The RBI had hiked the repo rate by 140 basis points (bps) in three months. SBI has launched a 75-day ‘Utsav Deposit’ Scheme valid till October 30. The bank is offering Fixed Deposit (FD) at a 6.10 per cent interest rate. Senior citizens will get 6.60 per cent on the FDs.

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– Bank of Baroda has launched ‘Baroda Tiranga Deposit Scheme’, providing a 5.75 percent interest rate on FDs for 44-days. The interest rate on deposits for 555 days is 6 per cent under this scheme. The scheme is valid for deposits less than Rs 2 crore and is valid till December 31, 2022. Senior citizens will get an extra 0.5 per cent on their deposits.

– Another public sector lender, Canara Bank, is offering a 6 per cent interest rate on FDs for 666 days.

– Punjab National Bank (PNB) is offering 5.75 per cent interest rates on deposits for 1,111 days.

-Several private sector banks have also hiked their FD interest rates. HDFC Bank, the largest lender in the country, is offering 5.75 per cent interest rate on deposits maturing between 5 years and one day to 10 years. 

-ICICI bank is offering 5.75 per cent interest rates on FDs maturing between 5 years and one day to 10 years. Axis bank is offering 6.05 per cent interest on deposits with a 17 – 18 months maturing period.

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