SBI hikes rates, loans to get dearer

Country's largest lender State Bank of India (SBI) today increased lending rates by 25 basis points (bps) and deposit rates by up to 100 basis points, a move that will make home, auto and other loans more expensive.

The bank has revised the base rate or the minimum lending rate upwards by 25 bps to 9.50% with effect from July 11, SBI said in a statement.

The interest rates on fixed deposits with a maturity period of 1-10 years has been fixed at 9.25%. The new deposit rates would be effective from July 11.

The bank also raised its benchmark prime lending rate (BPLR), used to determine floating interest rate loans, has been increased to 14.25% from 14%.

The decision follows the rate hike announced by the Reserve Bank in its policy review last month. Several banks, including major private lender ICICI Bank, Canara Bank, Bank of Baroda, have already raised their lending rates.

According to the statement, deposits up to 90 days will fetch an interest rate of 7% as against 6.25%.

The interest rates for fixed deposits with a maturity period of 1-10 years would be 9.25%. Current deposits between 1 year and 554 days earn an interest of 8.25%.

SBI has also decided to waive the penalty for premature withdrawal of deposits up to 90 days. For premature withdrawal of other deposits, it reduced the penalty to 0.50% from 1%.