State Bank of India (SBI) has hiked its marginal cost of funds-based lending rate (MCLR) by up to 25 basis points across tenors. The increase will lead to a higher outgo for customers who are under this system.

The revision follows the 35-basis point increase in the policy repo rate to 6.25 per cent by the Reserve Bank of India (RBI) last week.

Following the change, one-year MCLR for SBI’s customers will stand at 8.30 percent against 8.05 per cent earlier.

One-year MCLR is used by banks to price most of the consumer loans such as auto, home and personal.

In November, while the country’s largest lender had raised MCLR by 15 basis points across tenors, one year MCLR was increased by 10 basis points.

From October 1, 2019, all banks have to offer consumer loans only at an interest rate linked to an external benchmark such as the RBI’s reporate or the treasury bill yield.

After the RBI hiked the reporate, various lenders, including Bank of India (BoI) and HDFC Bank, had raised their benchmark lending rates.

In BoI, the effective repo-based lending rate (RBLR) was revised to 9.10 per cent.

HDFC Bank had also raised MCLR with the one year rate being increased by 50 basis points to 8.60 per cent.

Among the other lenders,ICICI Bank had already raised its MCLR rate effective December 1.

Following the revision, the one-year benchmarkrate was raised by 50 basispoints to 8.40 per cent from7.90 per cent earlier.

According to the SBI’s website, while overnight MCLR is now at 7.85 per cent (7.60 per cent), one-month and three-month rates are 8 per cent each from 7.75 per cent earlier.

Similarly, the six-month MCLR has been changed to 8.30 per cent from 8.05 per cent,while the two-year MCLR now stands at 8.50 per cent from 8.25 per cent earlier.