Mumbai: Country’s largest lender State Bank of India on Wednesday increased base rate or the minimum lending rate for the new borrower by 10 basis points to 7.6%, a move that would make all kinds of advances, including corporate loans, costlier.
The bank has revised the base rate below which bank cannot offer loans, upwards by 10 basis points from 7.5% to 7.6%, effective from 21 October 2010, SBI informed the Bombay Stock Exchange.
This is the first review of the base rate since it was introduced in July this year. As per the RBI guideline, banks have to review their base rate every quarter.
With the increase in base rate, all kinds of loans excluding housing and auto loans would be dearer by at least 10 basis points (0.1%).
Currently, SBI is offering teaser home and car loans till December and rates would be as announced earlier.
The revision in base rate follows the RBI’s move to raise short-term lending (repo) and borrowing (reverse repo) rates in its September monetary review.
In order to bring in more transparency, the base rate was introduced as replacement for the Benchmark Prime Lending Rate (BPLR) from 1 July this year.
SBI has also raised BPLR for the existing customers by 25 basis points to 12.5% from earlier 12.25%. The new rate would be effective from Thursday.
Earlier this month, SBI hiked fixed deposit rates by up to 75 basis points. The bank raised deposit rates from 25-75 basis points (0.25-0.75%) across various maturities.
For 91-180 days term deposits, SBI provides 5.5% interest, up 75 basis points from the existing rate.
Fixed deposits with maturity period between 1 year and 554 days was raised by 25 basis points to 7%, while deposits for 555 days would attract 7.5%.
The interest rate on term deposits of between 556 days and 1,000 days under different slabs, has been increased by 50 basis points, to 7.75%.