SBI, ICICI raise lending rates by 50 bps- Business News
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SBI, ICICI raise loan rates by 50 bps

The banks revised the base rate, or the minimum lending rate, upwards by 50 basis points from 9.50 per cent to 10 per cent.

 PTI   
  • Mumbai,  August 11, 2011  
  • |  
  • UPDATED   20:43 IST

Country's largest bank SBI on Thursday raised lending rates by 50 basis points, making its home, auto and corporate loans costlier.

The bank revised the base rate, or the minimum lending rate, upwards by 50 basis points from 9.50 per cent to 10 per cent, effective from August 13, State Bank of India (SBI) said in a statement.

The benchmark prime lending rate (BPLR) also goes up by similar percentage points to 14.75 per cent, making loans for existing borrowers dearer by at least 50 basis points.

Separately, country's largest private lender ICICI Bank also on Thursday announced a hike in lending rates by 50 basis points.

The bank raised the base rate, or the minimum lending rate, from 9.50 per cent to 10 per cent, effective from August 13, ICICI Bank said in a statement.

ICICI Bank has also announced an increase of 0.50 per cent in its benchmark prime lending rate and in its floating reference rate (FRR) for consumer loans (including home loans), it said.

The fixed rate customers will not be impacted by above hike and their contracted rates will remain unchanged, it said.

Following the Reserve Bank's decision to raise short-term key rates in its first quarter review of monetary policy last month, lenders have responded by increasing interest rates.

Major lenders including Punjab National Bank, Bank of Baroda, and Oriental Bank of Commerce have raised interest rates.

In the major bank category, HDFC Bank is the only bank which have not so far raised rates following July 26 policy rate hike.

The RBI had raised the short-term lending (repo) rate by 50 basis points to 8 per cent and the short-term borrowing (reverse repo) rate by a same margin to 7 per cent. The central bank had hiked key policy rates 11 times since March 2010 in its bid to tame inflation.

Subsequently, the interest rate under the Marginal Standing Facility, an additional borrowing window, has gone up to 9 per cent from the earlier level of 8.5 per cent.