State Bank of India (SBI), India’s largest lender, has hiked its benchmark prime lending rate (BPLR) by 70 basis points, or 0.7 percentage points, to 13.45 per cent. The move will make BPLR-linked loans costlier and the EMIs will go up. The current BPLR rate was 12.75 per cent and was last revised in June 2022.
“Benchmark prime lending rate (BPLR) revised as 13.45 per cent per annum with effect from September 15, 2022,” SBI posted on its website. It has also raised the base rate by similar basis points to 8.7 per cent, effective Thursday (September 14).
The EMI amount for the borrowers who have taken loans at the base rate would go up. These are the old benchmarks on which banks used to disburse loans. Now, most banks provide loans on the external benchmark based lending rate (EBLR) or the repo-linked lending rate (RLLR).
The bank revises both the BPLR and the base rate on a quarterly basis. The lending rate revision by the SBI is likely to be followed by other banks in the days to come. The increase in the benchmark lending rates comes weeks ahead of the Reserve Bank of India’s (RBI) monetary policy meeting, which is again expected to hike rates to tame inflation.
According to the schedule, the next three-day monetary policy meeting will be held from September 28 to September 30.
Apart from loan rates, SBI is also raising interest rates on fixed deposits. Last month, it hiked FD rates for certain tenures. The new SBI FD rates have already come into effect from last week. The SBI fixed deposit interest rates are applicable on domestic term deposits of below Rs 2 crore. This comes as a result of the Reserve Bank of India increasing its repo rates by 50 basis points earlier in August.
It hiked its FD rates by 15 basis points on deposits maturing between 180 days and 210 days from 4.40 per cent to 4.55 per cent for general public. The rates of other tenors have been kept unchanged by the bank. For deposits maturing between one year to less than two years, the SBI fixed deposit rate has also increased by 15 basis points to 5.45 per cent. For all other tenures, the SBI FD interest rates have also been hiked by 15 basis points.
“The revised rates of interest shall be made applicable to fresh deposits and renewals of maturing deposits. The interest rates on NRO term deposits shall be aligned as per the rates for domestic term deposits. These rates of interest shall also be made applicable to domestic term deposits from Cooperative Banks. Premature penalty for Bulk Term Deposits for all tenors will be 1 per cent. It will be applicable for all new deposits including renewals,” SBI said on its website.
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