State Bank of India indicates another 10-15 basis points MCLR hike

State Bank of India (SBI), India's largest lender, has indicated that its marginal cost of funds-based lending rates (MCLR) may increase further by 10-15 basis points (bps) after a recent hike. This adjustment primarily affects corporate loans tied to MCLR, reflecting rising costs of funds.

Retail loans, linked to the external benchmark lending rate (EBLR), remain unaffected. The decision follows RBI Governor Shaktikanta Das' call for banks to review their business models amidst a persistent credit-deposit growth gap, with the repo rate unchanged at 6.5% since February 2023.

SBI's move reflects ongoing efforts to manage asset-liability maturity and meet increased credit demand amid tight liquidity conditions. Despite deposit rate hikes peaking, lending rates are expected to adjust further, potentially impacting net interest margins and reflecting broader economic optimism and capital expenditure trends.