State Bank of India Announces Its MCLR [ Current Affairs ]


About announcement of marginal cost based lending rate (MCLR): The State Bank of India became the first bank who announces its MCLR. By this announcement, our loans may get cheaper with banks executing the new lending rate structure marginal cost based lending rate.

  • So, all banks will have to price their loans on MCLR from 1st April, 2016 which includes HDFC Bank, Bank of Baroda, State Bank of Travancore, Canara Bank, Union Bank of India and Punjab National Bank.

Benefits by announcement of MCLR:

  • SBI home loans would get cheaper by 0.10 % which is lower than the bank’s current home loan rate 9.55%.
  • So, for general borrowers home loans will be 9.45 % and for women borrowers’ home loans will be 9.40%.
  • For the other banks also the rates will come down on home loans and corporate loans.
  • Corporate loans which are contracted from the commercial paper market will move to the bank’s credit book as the rates are lower in assured terms or similar to the commercial market rates.
  • One year rate of SBI is 9.20 % with some risk premiums on it for both corporate and retail borrowers.
  • But the risk premiums for corporate borrowers will be higher than retail borrowers and for both category customers the loans will be cheaper as it gave an easier interest rate rule.

SBI and HDFC loans:

  • Overnight loan from SBI and HDFC Bank will be at 8.95%, while one month, at 9.05%, three months at 9.10%, one year at 9.20 % and two year at 9.30%.
  • The longer tenure loans like three to five year loans will now get priced at 9.80%.

Bank of Baroda loans:

  • Bank of Baroda will offer overnight loans and loans for one month at 9%, 3 month at 9.05%, 6 month at 9.10%, one year at 9.30%, 3 year at 9.35 and 5 year at 9.05%.

State bank of Travancore loans:

  • State Bank of Travancore offers higher rates with overnight rate at 9.35%, 3 month at 9.55%.

Canara Bank and Punjab National Bank loans:

  • Canara Bank fixed its 1 year rate at 9.40 % and five year at 9.70 % and Punjab National Bank had its 1 year rate at 9.40 % and five year rate at 9.70%.

- Published on: April 1, 2016