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08-17-2010, 02:00 AM #1
SBI raises lending rates by 50 basis pointsThe country’s largest lender, SBI raised the benchmark lending rate by 50 basis points from 11.75% to 12.25%, making the vehicle, home and other corporate linked ***** costlier.
However, for new borrowers the base rate effective from July 1, 2010 remains unchanged and stands at 7.5%.
This decision was followed after the hike in the key rates made by the central bank of the country, RBI to control the rising prices. "The bank has revised the benchmark prime lending rate upwards by 50 basis points from 11.75 per cent per annum to 12.25 per cent per annum. Effective from August 17," SBI said a filing to the Bombay Stock Exchange.
SBI has also increased its fixed deposit rates by upto 150 basis points across various maturities.
They have increased interest rate by 1.5 per cent to 4 per cent per annum for the term deposit with maturity between 15 to 45 days. This is the highest increase done by the bank among various maturity term deposits.
For fixed deposit between 181 days to less than 1 year the new interest rate will be 6 per cent against existing 5.25 per cent, while 555 days fixed deposit rate will attract interest rate of 7.25 per cent an increase of 1.25 per cent.
The term deposit rate between 3 years to 5 years will go up by 75 bps to 7.25 per cent from tomorrow, while 5 years to 8 years maturity slab is increased by 25 bps to 7.50 per cent.
Meanwhile the bank also announced launch of floating fixed deposit product linked with base rate with effect from September 6, 2010. "The bank announced launching of floating rate term deposit products linked to 'Base Rate' effective from September 6, 2010," SBI said in the filing.
Base rate is the lowest lending rate below which the bank cannot give loan to any customer. For one year floating fixed deposit, the interest rate will be 50 basis points (bps) lower than the existing base rate, which is currently at 7.5 per cent, it added.
For three years (floating) term deposit, the interest rate will be 25 bps lower than the base rate. While for the five years floating fixed deposit, the interest rate will be at base rate.
Following the monetary action, most of the public sector lenders, including Punjab National Bank, Bank of Baroda, Bank of India, Oriental Bank of Commerce and Canara Bank, responded by hiking their BPLRs by up to 50 basis points. At the same time, many banks have increased deposit rates...being a human...