Just a day ahead of the monetary policy announcement by RBI, the State Bank of India (SBI) hiked deposit and lending rates. Now the decision by the country's largest lender will make home, auto and other loans costlier, which may impact demand negatively.
According to SBI statement, it had raised the base rate to 9.8 percent per annum from the earlier rate of 9.7 percent. The new rate became effective from Thursday.
The Benchmark Prime Lending rate is also increased by 10 basis points to 14.55 percent per annum from the earlier rate of 14.45 percent.
These two rates determine the lending rates by the bank for home, auto and other loans.
It is noted that the country's largest lender's decision on interest rates came just a day ahead of the monetary policy review by the Reserve Bank of India (RBI). The central bank is widely expected to keep the key policy rates on hold Friday.
SBI also hiked term deposit rates. The sharpest increase was in the 7 to 179 days tenor for which the interest rate is hiked to 7.5 percent from the earlier rate of 6.5 percent.
For the maturity period from one year and up to 10 years, the rate is increased to 9 percent from the earlier rate of 8.75 percent.
(With inputs from IANS)