SBI Announces Revised MCLR Rates for October-November 2024
The State Bank of India (SBI), the largest public sector bank in India, has made headlines with its recent announcement regarding the Marginal Cost of Funds-based Lending Rate (MCLR) for the period from October 15 to November 15, 2024. This adjustment is significant for borrowers as it directly impacts the interest rates on various loans linked to the MCLR.
MCLR Adjustments: What’s New?
In a strategic move, SBI has reduced the interest rate for the one-month MCLR tenure by 25 basis points (bps), bringing it down from 8.45% to 8.20%. This reduction is noteworthy as it reflects the bank’s response to changing market conditions and aims to provide relief to borrowers. The other MCLR tenures, however, remain unchanged. The revised MCLR rates, effective from October 15, 2024, are as follows:
- Overnight MCLR: 8.20%
- One Month MCLR: 8.20% (reduced from 8.45%)
- Three Month MCLR: 8.50%
- Six Month MCLR: 8.85%
- One Year MCLR: 8.95%
- Two Year MCLR: 9.05%
- Three Year MCLR: 9.10%
This adjustment positions the MCLR-based rates within a range of 8.20% to 9.10%, providing borrowers with a more favorable lending environment, particularly for those seeking short-term loans.
Understanding MCLR
The Marginal Cost of Funds-based Lending Rate (MCLR) is a benchmark interest rate that banks use to determine the minimum interest rate at which they can lend. It is influenced by various factors, including the bank’s cost of funds, operating costs, and the risk premium. The MCLR framework was introduced by the Reserve Bank of India (RBI) to enhance transparency in the lending process and ensure that borrowers are charged a fair interest rate.
SBI’s Base Rate and BPLR
In addition to the MCLR, SBI has also set its base rate at 10.40%, effective from September 15, 2024. The Benchmark Prime Lending Rate (BPLR) has been revised to 15.15% per annum as of the same date. These rates serve as critical benchmarks for various loan products offered by the bank, impacting everything from personal loans to home loans.
External Benchmark Lending Rate (EBLR)
SBI’s External Benchmark Lending Rate (EBLR) for home loans is currently set at 9.15%. This rate is linked to the RBI’s repo rate, which stands at 6.50% plus a spread of 2.65%. Home loan interest rates can vary significantly based on the borrower’s CIBIL score, ranging from 8.50% to 9.65%. This variability underscores the importance of maintaining a good credit score for prospective borrowers.
Options for Borrowers Amid Rate Changes
SBI has outlined several options for borrowers to manage their loans in the event of changes in the benchmark rate (REPO). These options include:
- Paying a lump sum amount to maintain the existing EMI and tenure.
- Increasing the loan tenure within permissible limits.
- Increasing the EMI to ensure the loan is paid off within the existing tenure.
- A combination of the above options to best suit the borrower’s financial situation.
These flexible options are designed to help borrowers navigate the challenges posed by fluctuating interest rates.
Latest SBI Fixed Deposit (FD) Interest Rates
For those looking to invest, SBI has also updated its fixed deposit interest rates. As of October 2024, the rates for the general public and senior citizens are as follows:
| Tenor | Existing Rates for Public (%) | Revised Rates for Public (%) | Existing Rates for Senior Citizens (%) | Revised Rates for Senior Citizens (%) |
|---|---|---|---|---|
| 7 days to 45 days | 3.50 | 3.54 | 4.46 | 4.56 |
| 46 days to 179 days | 5.50 | 5.56 | 6.75 | 6.75 |
| 180 days to 210 days | 6.25 | 6.56 | 7.25 | 7.25 |
| 211 days to less than 1 year | 6.25 | 6.56 | 7.25 | 7.25 |
| 1 Year to less than 2 years | 6.80 | 6.87 | 7.30 | 7.32 |
| 2 Years to less than 3 years | 7.00 | 7.50 | 7.50 | 7.50 |
| 3 Years to less than 5 years | 6.75 | 6.75 | 7.25 | 7.25 |
| 5 Years and up to 10 years | 6.50 | 6.57 | 7.50* | 7.50* |
*Including an additional premium of 50 bps under the “SBI We-care” deposit scheme.
Additionally, SBI offers specific tenor schemes such as the "400 days" (Amrit Kalash) and "444 days" (Amrit Vrishti) with competitive interest rates for both the general public and senior citizens.
Conclusion
The recent adjustments in SBI’s MCLR and interest rates reflect the bank’s commitment to providing competitive lending options while responding to market dynamics. Borrowers and investors alike can benefit from these changes, making it an opportune time to explore various financial products offered by SBI. Whether seeking a loan or investing in fixed deposits, understanding these rates and options is crucial for making informed financial decisions.