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SBI loans to get costlier as bank hikes key lending rate
February 15, 2023
The Reserve Bank of India (RBI) established MCLR in 2016 to determine lending rates for various loans. It usually takes the same trajectory as the RBI monetary policy committee (MPC) takes.
The SBI’s MCLR hike comes just days after the RBI MPC announced a 25 bps repo rate hike to 6.5 per cent on February 8.
“The MPC was of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored, break the persistence of core inflation and thereby strengthen the medium-term growth prospects. Accordingly, the MPC decided to raise the policy repo rate by 25 basis points to 6.50 per cent. The MPC will continue to maintain a strong vigil on the evolving inflation outlook so as to ensure that it remains within the tolerance band and progressively aligns with the target,” RBI Governor Shatikanta Das said during the announcement.
The inflation, despite a cumulative rate hike of 250 bps, has still managed to move out of the RBI’s upper tolerance limit of 6 per cent. India’s retail inflation in January rose to 6.52 per cent. It was 5.72 per cent in December. The wholesale inflation, however, has eased to a two-year low of 4.73 per cent.
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