Country’s largest lender State Bank of India has declared a hike in loan interest rates by 75 bps, making housing , auto and other loans tougher 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 May2011, the banker said. The increase in State Bank of India’s lending rates comes a week after the Reserve Bank of India raised its lending and borrowing rates by 50 bps. SBI has also increased its standard prime lending rate by 75 bps which would mean that current 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 hike spree since the RBI’s decision to raise short-term key rates in its annual credit policy on 03May2011.
Over a dozen banks, including PNB, ICICI Bank, Oriental Bank of Commerce and Corporation Bank, have raised interest rates in past one week.