Country’s largest lender State Bank of India has declared a hike in loan interest rates by 75 basis points (bps), making housing, auto and other loans dearer for both new and existing debtors. State-owned SBI has increased the base rate, or the minimum lending rate, by 0.75 % to 9.25%. The new rate is effective from 12 May 2011, the Banker said.
The increase in State Bank of India’s loan rates comes a week after the Reserve Bank of India raised its lending and borrowing rates by 50 basis points. SBI has also increased its standard prime lending rate by 75 bps which would mean that existing borrowers will also have to pay more for their loans. With this, BPLR goes up to 14 %.
State Bank of India has also elevated deposit rates by up to 225 bps on selected 04 maturities. Many banks have been on a rate increment spree since the RBI’s decision to raise short-term key rates in its annual credit policy on 03 May 2011. Over a dozen banks, including PNB, ICICI Bank, Oriental Bank of Commerce and Corporation Bank, have raised interest rates in past one week.
