SBI raises BPLR and deposit interest rates

State Bank of India, the country’s largest lender has raised its benchmark lending rates by 50 basis points to 12.25 per cent, thus home, vehicle and other corporate loans linked with the rate become costlier for the existing borrowers. For the new borrowers bank has set the base rate at 7.5 per cent.

The bank has also raised its deposit rates by up to 150 basis points across various maturities.

Before this various lenders had raised lending as well as deposit rates after the Reserve Bank of India had increased its key rates to control rising prices.

SBI said a filing to the Bombay Stock Exchange, “The bank has revised the benchmark prime lending rate upwards by 50 basis points from 11.75 per cent p.a. to 12.25 per cent p.a. effective from August 17.”

In case of fixed deposits on maturity between 15 to 45 days SBI has raised rates by 1.5 per cent to 4 per cent per annum, this is the highest raise done by the bank among various maturity term deposits.

For tenures between 181 days to less than 1 year the new interest rate will be 6 per cent against existing 5.25 per cent, while for 555 days fixed deposit rate has been set at 7.25 percent, an increase of 1.25 per cent.

On maturity between 3 years to 5 years rates have been raised by 75bps to 7.25 per cent, while for 5 years to 8 years slab the rates have been raised by 25 bps to 7.50 per cent. The revised deposit rates will come into effect from tomorrow.

The bank has also announced that it will be launching floating fixed deposit product linked with base rate with effect from September 6, 2010.

SBI said in the filing, “The bank announced launching of floating rate term deposit products linked to ‘Base Rate’ effective from September 6, 2010.”

Base rate is the lowest lending rate below which the bank cannot give loan to any customer.

It said, for 1 year floating fixed deposit the interest rate has been set to 50 basis points (bps) lower than the existing base rate which is currently at 7.5 per cent.

For 3 years (floating) term deposit the interest rate will be 25 bps lower than the base rate and for 5 years floating fixed deposit the interest rate will be at base rate.

However last month the RBI in its monetary review had raised the short term borrowing (reverse repo) rate by 50 basis points and lending (repo) rate by 25 bps to control inflation.