SBI likely to raise lending rates shortly

Country's largest lender State Bank of India is likely to raise its minimum lending rate or base rate by 50-75 basis points later today, the bank's Chairman said.

"There is a possibility of hiking base rate by 50-75 basis points by today evening," SBI Chairman Pratip Chaudhuri told reporters here.

The bank's base rate currently stands at 9.25%, which is probably the lowest in the industry.

With the hike in the lending rates, home, auto and commercial loans will become expensive.

As many as a dozen banks, including private sector leader ICICI Bank have already hiked their lending rate by 25 basis points in response to the tightening of monetary policy by the Reserve Bank last month.

The RBI hiked key short-term lending and borrowing rates by 25 basis points (0.25%) each with immediate effect to tackle inflation. The short-term lending (repo) rate rose to 7.5% and the borrowing (reverse repo) rate at 6.5%.

Last week, besides ICICI Bank, other public sector lender Canara Bank, Indian Overseas Bank, Corporation Bank and Dena Bank also hiked their base rate by 25 basis points each.