SBI hikes MCLR for second time in a month, EMIs set to go up; check latest rates

State Bank of India, the country's largest lender, has raised its marginal cost of funds-based lending rate (MCLR) across all tenures. The decision to hike MCLR will lead to an increase in EMIs for borrowers.

As per the bank's website, overnight, one-month and three-month MCLR has increased from 7.05% to 7.15%. Likewise, the MCLR on six-month tenure will now stand at 7.45% against 7.35%. Accordingly, the one-year MCLR rate has been hiked from 7.4% to 7.5%.

This is the second hike in MCLR by the SBI in a month. The public-sector lender had previously revised MCLR on June 15. With the rise in MCLR, SBI's existing borrowers will have to pay more for their EMIs.

The decision comes amid the Reserve Bank of India (RBI) adopting a hawkish stance to tame inflation. The central bank has indicated that it will further tighten the policy rate in its next Monetary Policy Committee meeting in August. The central bank has already hiked the repo rate twice in May and June to tame inflation.

Following the rate hike by the RBI, several banks have increased interest rates.

Most consumer loans such as auto, home and personal loans are linked to MCLR which came into effect on April 1, 2016, shifting from the older framework, for better transmission of interest rates to customers.