India’s largest lender, State Bank of India on Thursday said it increased its base rate, or the minimum rate of lending, to 9.80%, a day ahead of the RBI’s policy review.
“State Bank of India has revised the base rate by 0.10% from 9.70% per annum to 9.80%,” the government-controlled bank said in a statement. Retail term deposit rates have been revised upwards, it said.
“The cost of funds has gone up in the past few months,” said Saraswathy Atmanathan, chief general manager, SBI. “Our competitors have revised the deposit rates and we were worried that we may lose customers if we do not hike rates.”
All top private sector lenders, including ICICI Bank, HDFC Bank and Axis Bank, had hiked rates to protect net interest margins.
New housing loans of the State Bank of India under Rs. 30 lakh will come at 10.10 % as against 9.95 % earlier, while interest rates on auto loans will go up to 10.75 % from 10.45%.
Interest rates for deposits from seven days to 179 days have been increased from 6.5% to 7.5% and rates on deposits of 180-210 days have been revised upwards from 6.5% to 6.8%.