ID :
137967
Tue, 08/17/2010 - 08:53
Auther :

SBI raises benchmark lending rate by 50 basis points

New Delhi, Aug 16 (PTI) State Bank of India, the
country's largest lender, Monday raised benchmark lending rate
by 50 basis points to 12.25 per cent, making home, vehicle and
other corporate loans linked with the rate costlier to
existing borrowers.

However, for new borrowers the base rate, which became
effective from July 1 this year, stands at 7.5 per cent.
The state-run lender also increased its fixed deposit
rates by up to 150 basis points across various maturities.
The decision comes days after the Reserve Bank of India
increased its key rates to control rising prices.
"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," SBI said a filing to
the Bombay Stock Exchange.

As far as revision in fixed deposit rates is concerned,
SBI increased interest rate by 1.5 per cent to 4 per cent per
annum for the term deposit with maturity between 15 to 45
days. This is the highest increase done by the bank among
various maturity term deposits.
For fixed deposit between 181 days to less than 1 year
the new interest rate will be 6 per cent against existing 5.25
per cent, while 555 days fixed deposit rate will attract
interest rate of 7.25 per cent an increase of 1.25 per cent.
The term deposit rate between 3 years to 5 years will go
up by 75 bps to 7.25 per cent from tomorrow, while 5 years to
8 years maturity slab is increased by 25 bps to 7.50 per cent.
Meanwhile the bank also announced launch of floating
fixed deposit product linked with base rate with effect from
September 6, 2010.
"The bank announced launching of floating rate term
deposit products linked to 'Base Rate' effective from
September 6, 2010," SBI said in the filing.
Base rate is the lowest lending rate below which the bank
cannot give loan to any customer.
For one year floating fixed deposit the interest rate
will be 50 basis points (bps) lower than the existing base
rate which is currently at 7.5 per cent, it added.
For three years (floating) term deposit the interest rate
will be 25 bps lower than the base rate. While for the 5 years
floating fixed deposit the interest rate will be at base rate.
The Reserve Bank of India, in its monetary review last
month, raised the short-term borrowing (reverse repo) rate by
50 basis points and lending (repo) rate by 25 basis points to
tame inflation.
Following the monetary action, most of the public sector
lenders, including Punjab National Bank, Bank of Baroda, Bank
of India, Oriental Bank of Commerce and Canara Bank, responded
by hiking their BPLRs by up to 50 basis points. At the same
time, many banks have increased deposit rates. PTI DP
KAB


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