The Hindu : Business : SBI, Central Bank hike interest rates

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SBI, Central Bank hike interest rates

The two banks raise the BPLR by 100 basis points each

MUMBAI: With mounting pressure on its margins, primarily due to the Reserve Bank of India’s latest policy actions, State Bank of India on Monday hiked its benchmark prime lending rate by one percentage point to 13.75 per cent with effect from Tuesday.

SBI also hiked its deposit rates by 0.25-0.75 percentage point on various maturities effect from Saturday, a senior SBI official told PTI here.

“Even after this hike, SBI’s BPLR (13.75 per cent) is among the lowest in the industry. We expect that this would attract more customers to the bank. The bank is still confident of maintaining a 20-22 per cent growth in advances and around 25 per cent growth in deposits for the remaining part of the fiscal,” the official said.

The hike in BPLR will not affect the existing and new housing loans up to Rs. 30-lakh, besides, existing auto loans and all types of education loans, the official said.

However, new auto loan borrowers would have to pay more following the hike, he said. SBI announced its hike after many banks, including its nearest competitor, ICICI Bank, increased their BPLRs to prevent a drastic fall in their margins after the apex bank hiked the cash reserve ratio and short-term repo rate by 0.25 and 0.50 percentage points, respectively, to check inflation.

Central Bank

Central Bank of India on Monday increased its Benchmark Prime Lending Rate (BPLR) by one percentage point to 14 per cent with immediate effect.

The hike will make the BPLR-related loans of the bank dearer to its customers. With this, vehicle loans, having a three-year tenor, will now carry an interest rate of 12 per cent as against 10.5 per cent earlier, the bank’s website said.

However, the lender has spared its educational loan borrowers and housing loans up to Rs. 20 lakh from the hike in the benchmark rate, the bank said.

Customers, who opt for home loans above Rs. 20 lakh in a five-year tenor, will have to pay one percentage point more floating rate at 10.75 per cent as against 9.75 per cent earlier, the bank said.

The fixed rate for housing loans above Rs. 20 lakh with a tenor of up to five years has been increased to 11.25 per cent from the existing 10.25 per cent. Similarly, floating rates for 5-10 year home loans above Rs. 20 lakh have been revised to 11.25 per cent from 10.25 per cent.

The bank’s Asset Liability Committee (ALCO), which met on Saturday, decided to hike the rates in view of the recent monetary policy actions from the Reserve Bank of India in its quarterly review of its annual monetary policy. — PTI

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