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Shares of State Bank of India ended at Rs 571.60, up Rs 13.35, or 2.39% on BSE.
The bank, however, did not change the marginal cost of the funds-based lending rate (MCLR), which would have lowered the cost for all borrowers.
Banks review the MCLR on a monthly basis, while the base rate review takes place once a quarter. Currently, banks set interest rates on loans with reference to the BPLR.
Earlier in August, the SBI raised its benchmark policy rates by up to 50 basis points (or 0.5%). The external benchmark-based lending rate (EBLR) and the pension-linked lending rate (RLLR) were raised by 50 basis points, while the increase in the marginal cost of the funds-based lending rate (MCLR) is 20 basis points for all mandates.
SBI’s EBLR rose to 8.05% and RLLR rose a similar 50 basis points to 7.65%. Banks add a credit risk premium (CRP) over EBLR and RLLR while granting any type of loan, including home and auto loans.
With the revision, the one-year MCLR increased to 7.70% from 7.50% previously, while for two years it increased to 7.90% and for three years to 8%. Most loans are tied to the one-year MCLR rate.
