Bad news came for the SBI customers, Customers taking loan from the bank will now have to pay higher loan installments.

A bad news has come today for India's largest bank SBI customers. Customers taking loan from the bank will now have to pay higher loan installments. The bank has increased the rates of Marginal Cost of Funds Based Lending Rates i.e. MCLR for the second consecutive month. According to the information given by the bank, the bank's MCLR (MCLR) rates have been increased by 0.10 percent from today. Due to increase in MCLR rates, now the existing and new loans of the bank have become costlier.

State Bank customers have got this blow for the second consecutive month. Earlier in January also, the bank had increased the MCLR by 10 basis points. Significantly, the Reserve Bank (RBI) had increased the repo rate by 25 basis points only last week. This was the sixth consecutive hike by the Reserve Bank. After the decision of the Reserve Bank, many government and private banks of the country have made loans expensive.

The full form of MCLR is Marginal Cost of Funds Based Lending Rate. LCLR was introduced by RBI from 2016. With this rate commercial banks determine the rate of interest on the loan. Prior to the introduction of the MCLR system, the interest rates charged by banks were based on the 'Base Rate' mechanism. The base rate is indicated by banks as the lowest possible lending rate. The base rate was actually the rate below which it was not possible for banks to lend. Changes in MCLR affect almost all types of loans. In such a situation, if you have taken home loan, personal loan or auto loan from State Bank, now all of them will become expensive. If you are an old customer then you will have to pay higher EMI. Along with this, you can also limit the EMI by increasing the loan tenure.