EMIs To Go Up As SBI, ICICI Banks Hike Lending Rates
New Delhi: The Equated Monthly Instalments (EMIs) on home loans and auto loans are expected to increase as two leading lenders in the market, viz. State Bank of India (SBI) and ICICI Bank decided to increase their lending rates from Saturday.
The State Bank of India, which is the largest lender in the market increased the marginal cost of funds based lending rate (MCLR) by 20 basis points (bps) across all loan tenures. The MCLR is the standard lending rate to which all loan rates are linked. As a result of this hike, the MCLR of SBI will be 8.45% wef September 1, 2018.
Similarly, ICICI Bank also hiked its MCLR by 15-25 bps across all the loan tenures. The MCLR of ICICI Bank will be 8.55% from September 1, 2018. As a result, the one-year MCLR of the bank will be 8.55%, a rise of 15 bps.
The decision to increase the lending rate was taken by the banks as the net profit was down by almost 20% due to an increase in bad loans during the April-June period of the current financial year.