SBI hikes lending rate by 0.1%, EMIs to go up

The SBI move follows an off-cycle rate increase by the Reserve Bank of India which hiked the repo rate by 0.40% to 4.40%

The country's largest lender State Bank of India has raised its marginal cost of funds based lending rate by 10 basis points or 0.1% across all tenures, a move that will lead to an increase in EMIs for borrowers.

This is the second hike in a month raising the cost by 0.2% with the two consecutive increases.

The revision follows an off-cycle rate increase by the Reserve Bank earlier this month. The central bank hiked the repo rate -- at which it lends short term money to banks -- by 0.40% to 4.40%.

The lending rate revision by SBI (State Bank of India) is likely to be followed by other banks in the days to come.

With the increase, EMIs will go up for those borrowers who have availed loans on MCLR (Marginal Cost of Funds based Lending Rate), not for those, whose loans are linked to other benchmarks.

SBI's External Benchmark based Lending Rate (EBLR) is 6.65%, while the Repo-Linked Lending Rate (RLLR) is 6.25% effective April 1.

Banks add Credit Risk Premium (CRP) over the EBLR and RLLR while giving any kind of loan, including housing and auto loans.