NEW DELHI: The country’s largest lender, the State Bank of India (SBI) today said it will shortly raise car and other personal loan rates, excluding housing and education, by an average of 0.75%.
SBI MD, Ashok Aggarwal, however, clarified that some loan rates may rise by 1% and some by 0.5%, but the average would be 0.75%. The interest rate hike would be announced in a few days, he added.
Aggarwal’s statement came amid reports that ICICI and Kotak are increasing auto interest rates by 0.75 to 1% this weekend.
Pursuant to increase in cash reserve ratio by the Reserve Bank, SBI had announced 0.75% in its benchmark prime lending rate to 12.25% last month.
However, all the existing housing and educational loans as well as new educational loans up to Rs4 lakh are excluded from the hike. Similarly, all the existing and future agriculture production loans less than Rs3 lakh are excluded from its impact. SBI had also raised interest rates on some of its deposit schemes.
Aggarwal said hardening interest rate cycle has peaked in the economy and the rates are likely to stabilise at these levels. “Usually, interest rates rise towards the end of year and stabilise at the beginning of the year because of slack season,” he said.