EMIs to pinch harder as lending rates rise

SBI, ICICI Bank to hike rates

On standalone basis, the net profit was down over 20% as bad loans rose during the April-June period of the current financial year.

Equated Monthly Instalments (EMIs) on home and auto loans will pinch more with two leading lenders, State Bank of India (SBI) and ICICI Bank, deciding to increase their lending rates from Saturday.

The SBI — the country’s largest lender — increased the marginal cost of funds based lending rate (MCLR) by 20 basis points (bps) across all loan tenures. The MCLR is the benchmark lending rate to which all loan rates are linked (100 bps = 1 percentage point).

As a result, the one-year MCLR of SBI, to which most of the retail loans are linked, will be 8.45% with effect from September 1.

ICICI Bank also increased its MCLR by 15-25 bps across various loan tenures. As a result, the one-year MCLR of the bank will be 8.55%, a rise of 15 bps.