The country's largest lender State Bank of India (SBI) today raised lending and deposit rates on select maturities by 25 basis points in response to policy rate hike announced by Reserve Bank of India last month.
SBI revised the base rate or the minimum lending rate 25 basis points to 8.25%, the bank said in a statement.
With the increase in base rate, all kinds of loans excluding housing and auto loans would be dearer by at least 25 basis points (0.25%).
At the same time, SBI's Benchmark Prime Lending Rate (BPLR) for the existing customers has been increased by 25 basis points to 13%.
Besides, the bank has also increased fixed deposit rates on two select maturities by 25 basis points.
Both 555 days and 1,000 days fixed deposits would attract 9.25% from existing 9%. The new rates would be effective from February 14.
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Banks have been raising interest rates following a 0.25 percentage point hike in short-term lending (repo) and borrowing (reverse repo) rates announced by the Reserve Bank in its third quarterly review of monetary policy last month.
More than a dozen banks including Punjab National Bank, Bank of Baroda, Union Bank of India and Indian Overseas Bank has already revised interest rates since the third quarterly review of the monetary policy on January 25.
While the higher deposit rates would provide better returns to savers, rise in lending rate would increase the EMIs for auto and home loan borrowers. Besides, corporate loans too would become expensive.