State Bank of India has increased its external benchmark-linked, repo-linked and selected MCLR rates following the RBI’s 25-basis-point repo rate rise, with the impact depending on borrowers’ loan terms and reset dates.
State Bank of India has increased a range of lending rates after the Reserve Bank of India lifted the repo rate by 25 basis points to 5.50% earlier this month, a move that is likely to feed through to borrowing costs for some customers. According to the bank’s revised schedule, the changes took effect on October 15 and affect loans tied to external benchmarks as well as certain MCLR-linked products.
SBI lifted its external benchmark-linked lending rate to 8.15% before the addition of the credit risk premium and bank spread, while the repo-linked lending rate rose to 7.75%, also excluding those components. The bank also raised its marginal cost of funds-based lending rates, or MCLR, by 15 basis points on selected tenures, including the three-month, six-month, one-year, two-year and three-year buckets. Overnight and one-month MCLR rates were left unchanged at 7.85%.
The adjustment comes after the central bank’s first repo rate increase since February 2023, a shift that signals a tighter monetary stance. Reuters-linked coverage from other business outlets has shown that several state-owned lenders, including Punjab National Bank, Bank of Baroda and Indian Bank, have also responded to the RBI move by raising repo-linked borrowing rates, reinforcing the likelihood that loan costs will climb across parts of the banking system.
For borrowers, the effect will depend on the structure of their loans and the date on which rates reset. Customers whose loans are linked to external benchmarks such as the repo rate are usually affected more quickly than those on MCLR-based pricing, which adjusts according to a bank’s funding costs and reset cycle. In practical terms, that can mean a higher equated monthly instalment or a longer repayment period, depending on the terms of the loan agreement.
The latest increase is a reversal from SBI’s move in June 2025, when it lowered key lending rates after an RBI rate cut. That earlier reduction had brought down both its external benchmark rate and repo-linked lending rate, showing how quickly large lenders can pass monetary policy changes through to household borrowing costs in either direction.
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