State Bank of India, the country's largest lender, on Saturday hiked its benchmark prime lending rate by 0.50 per cent from 12.25 per cent to 12.75 per interest
The new rate will come into effect from April 9, the bank said in a press release in Mumbai on Saturday.
Many other banks such as ICICI Bank and HDFC have already raised PLR by up to one percentage points, while Bank of Baroda has increased its PLR by 75 basis points.
Banks are increasing interest rates following the RBI's decision on March 30 to hike the repurchase rate at which it lends to banks and the deposits all banks must keep with.
The central bank's move was part of its drive to check high credit growth and tame inflation.