Days after RBI hiked policy rate, country's largest lender State Bank of India (SBI) today raised its lending rate by 0.20 per cent to 10 per cent, a move that is likely to be followed by other banks.
The bank has revised the base rate or the minimum lending rate to 10 per cent from 9.80 per cent effective tomorrow, SBI said in a statement.
With the revision in base rate, EMI for home, auto and consumer durable loans will go up. However, the bank is offering new loans at concessional rates for a limited period ending January 31, 2014.
At the same time, the Benchmark Prime Lending Rate (BPLR) was also raised by 0.20 per cent from 14.55 per cent to 14.75 per cent.
Private sector lender, Axis Bank has also revised the interest rates on select maturities for fixed deposits amount less than Rs 1 crore. In two buckets there has been upward revision of 0.25 per cent while there is downward revision of 0.25 per cent in 9 buckets.
Term deposit between 13 to less than 15 months now attracts 8.75 per cent, up by 0.25 per cent.
At the same time, there has been 0.25 per cent decrease in various buckets between 61 days to less than six months to 8.25 per cent.
Similarly, various buckets between 6 months to less than 11 months the decrease is by similar percentage points to 8.5 per cent.
In case of term deposit between 46-60 days, rates have been revised downward by 0.5 per cent from 8.5 per cent earlier.
The new rates are effective from November 1, according to Axis Bank website.
SBI's decision came a day after HDFC Bank raised the base rate by 0.20 per cent to 10 per cent.
Commenting on the base rate increase, SBI Chairperson Arundhati Bhattacharya said it is on account of the rise in cost of funds.
Repo rate has gone up by 0.50 per cent since SBI had last raised it, she said, adding, the bank has not raised rates to that extent but by only 0.20 per cent.
It is in line with the market and the bank base rate still remains one of the lowest, she added.
Earlier this month, SBI raised fixed deposit rate by 0.2 per cent on select maturity.
With the revision, term deposit between 180-210 days less than Rs 1 crore now earn 7 per cent against 6.80 per cent earlier.
Soon after RBI