SBI and PNB raises the EMIs of Home Loan, Auto Loan and Personal Loan
Posted on: 02/Mar/2018 12:52:18 PM
Recent updates from the government-run banks, State Bank of India (SBI) and Punjab National Bank (PNB), confirmed their hiking up of the one year MCLR (Marginal Cost of fund based Lending Rates) affecting the individual borrowers in paying the interest money for their loans.
SBI hikes the one year MCLR by 20 basis points (bps), that equals to 8.15 percent and the PNB raises the one year MCLR by 15 basis points (bps) which rounds around 8.30 percent.
For a six month MCLR the SBI raised the percentage to 8% and the three year loan interest rate goes up to 25 bps that is 8.35 percentage.
SBI and PNB are the state owned banks having largest number of customers, especially in the borrowing sector. So this lending rate hike move will directly leave the weight on to the shoulder of loan borrowers.
The Delhi Based bank, PNB is now in a big crisis after the country’s largest financial fraud has come to limelight recently. This further caused a loss of around Rs 13,000 crore. This sudden increase of 15 bps on one year MCLR has further stirring up the controversy in the bank’s integrity.
The Reserve Bank of India (RBI) prevails on an accommodative stance from January 2015 and this increase in lending rates comes in terms with this neutral equivalence of RBI. Now the RBI has a repo rate of 5.75 percent.
The sudden move of increasing lending rates totally changes the financial calculus of the individual borrowers who had a plan to resolve the loan with that old percentage. This will rearrange their Income vs Expenditure values, affecting the day to day life for the low income group. When asked about this lending rate hike, the SBI Managing Director and Digital Banking Head, Mr. P. K. Gupta said that there is a liquidity situation going to a minor deficit mode and so the increase in interest rate will stabilize the financial balance. SBI reports confirmed that the bond rates also raised to 125-150 bps. Mr. Gupta also mentioned about the comparative structure of interest rate in other banks concerning the Home Loans, Automobile loans and Personal Loans, that the lending rate is lower than the other banks, including private and other state owned banks.
Now the inflation of these state owned banks are being stabilized and so the official reports says that this lending rate will be a solid constant and will not change any further as the surplus is taken away from the deficit mode.
PNB’s updates confirmed the term dependent interest rate increase; one month MCLR to 7.80 percentage, three-month MCLR to 7.95 percentage and for one year MCLR to 8.25 percentage.
There is also a change in retail deposit sectors of these national banks. For the amount below One Crore the interest rate in SBI was increased by 0.50 percentage. The deposits maturing after one year and less than two years got a hike of 0.15 percentage to 6.40 percentage. PNB also increased the bulk deposit interest rate to 6.75 percentage from its earlier rate of 6.50 percentage.
