SBI decision: The increase in interest rates from the bank comes following it was announced that the Reserve Bank of India (RBI) raised its repo rates. RBI has raised its repo rates to 2.5 percent since May of last year.
If your account is with the State Bank of India (SBI)
or you’ve borrowed money from the largest bank in the public sector. This news could be useful for you. SBI has raised the rate of short-term loans to 0.10 percent. Short-term loans refer to loans ranging that ranges from one day to three years. This rise in the interest rate of the bank comes following the increase in repo rates of that of the Reserve Bank of India (RBI). RBI has raised the rate of repo in increments of 2.5 percent since the beginning of May last year.
The full impact of the repo rate increase on customers
Banks is placing the full burden of this rate hike on their customers. When you get loans from banks and you are required to pay higher interest and EMI than you did before. But banks haven’t raised the interest rates on deposits in line with. In the week that ended January 13th, 2023 the banks’ loans have increased by 16.5 percent annually. In contrast, the growth in deposits is just 10.6 percent. According to the data available at the website for the bank’s official website, SBI has increased its Marginal Cost of Funds Based Lending Rate (MCLR) by 0.10 percent to 7.95 percent over a day.
3-percent interest on deposits over the amount of 10 million.
Additionally aside, it is also worth noting that the MCLR is raised up to 8.10 percent for loans ranging from up and three months. The rate of interest on six-month loans has been raised from 8.30 percent up to 8.40 percent. The interest rate for a one-year loan has increased from 0.10 percent to 8.50 percent. The rate of interest for a two-year loans will increase to 8.60 percent, while the rate for a 3-year credit will reach 8.70 percent. For comparison, the bank offers 2.70 percent interest on savings accounts with deposits of less than 10 crores, and 3 percent interest on deposits over 10 crores.
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