State Bank of India (SBI), the country's largest lender, today announced a 50 basis point increase in its base lending rate to 10 per cent from 9.50 per cent, thereby raising borrowing cost for home, auto and corporate loan customers.
The revision in the base rate, on which all other lending rates are based, is effective from 13 August, the bank said in a release.
SBI also raised its benchmark prime lending rate (BPLR) by similar percentage points to 14.75 per cent, making loans for existing borrowers costlier by at least 50 basis points.
The rate hike is in line with RBI's monetary policy stand as announced in its first quarter review of monetary policy last month. The central bank had raised the short-term lending (repo) rate by 50 basis points to 8 per cent and the short-term borrowing (reverse repo) rate by a same margin to 7 per cent.
RBI had hiked key policy rates 11 times since March 2010 in its bid to tame inflation.
The interest rate under the Marginal Standing Facility, an additional borrowing window with the RBI, has also gone up to 9 per cent from the earlier level of 8.5 per cent.
Almost all major banks, including Punjab National Bank, Bank of Baroda, Oriental Bank of Commerce, have responded by increasing interest rates.
SBI also revised upwards deposit rates by 50 bps in '180 days to 240 days' maturity. The revised interest rates for domestic term deposits below Rs1 crore are also effective from 13 August 2011.