The country’s largest public sector bank State Bank of India (SBI) has increased the Marginal Cost of Funds Based Lending Rates (MCLR) by 5 basis points (BPS) from July 14 to July 15.
According to SBI’s website, MCLR based rates will now be between 8 per cent and 8.75 per cent. MCLR is the minimum rate at which a bank can lend to customers. Earlier on March 15, the bank had increased the benchmark prime lending rate (BPLR) by 70 basis points.
The decision to increase the landing rates by SBI has been taken after the recent decision of the Reserve Bank of India (RBI) to maintain the repo rate at 6.50 per cent. In response to rising inflation, the RBI has increased interest rates by 225 basis points since May. One bps is one hundredth of a percentage point. The jump in lending rates is being seen as an effect of rate hikes being implemented by RBI’s Monetary Policy Committee since the middle of last year to control inflation.
Profits increase in Q3 2023
The company’s profit has increased from Rs 9,113 crore to Rs 16,695 crore in the January-March quarter of the business year 2022-23. During this period, the NII of the bank increased from Rs 31,197 crore to Rs 40,392 crore. During this, the NPA of the bank has also come down. Gross NPAs came down from 3.14% to 2.78% in the January-March quarter as compared to the October-December quarter of the business year 2022-23. Net NPA reduced from 0.77% to 0.67%.
