Two banks including State Bank of Travancore (SBT) today raised lending rates by 50 basis points which will make auto, home and other loans from the lender costlier to existing as well as new borrowers.
The revised base rate or the minimum lending rate will be 9.50% from May 9, up from 9% now, SBT said in a filing to the Bombay Stock Exchange.
The rate hike comes within days of the Reserve Bank hiking its policy rates by 50 basis points, making cost of funds dearer for commercial banks.
The bank has also announced increase in its benchmark prime lending rate (BPLR) by 50 basis points to 14.25%.
Besides, private sector Development Credit Bank raised its both its base rate and BPLR by 50 basis points.
The higher lending rates would make loans dearer for both new and existing auto, home and corporate borrowers.
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Yesterday, ICICI Bank and five public sector banks raised their lending rates by up to 50 basis points.
Banks have been on a rate hike spree since the Reserve Bank's decision to raise short-term key rates including the repo and reverse repo by 50 basis points in its Annual Credit Policy on May 3.
The repo rate and reverse repo rate now stand at 7.25 and 6.25 basis points, respectively.
Besides, the banking regulator also upped the savings bank deposit interest rate to 4% from 3.5%.