STATE BANK HIKES PRIME AND HOME LOAN RATES
The country’s largest commercial bank, State Bank of India (SBI), on Monday announced a hike in its benchmark prime lending rate (BPLR) by 75 basis points, the highest by any bank so far in the latest round of rate hikes. The hike includes home loans, excluding existing loans falling under the priority sector.
This is the first instance of a public sector bank revising upwards its home loan rates after finance minister P Chidambaram recently asked for these rates to be held.
Chidambaram’s words obviously had little impact on SBI as the Reserve Bank of India (RBI) effected a second round of cash reserve ratio (CRR) hikes, increasing it by 50 basis points, forcing several banks to raise rates.
SBI’s rates have been revised upwards from 11.5 percent to 12.25 percent with effect from February 20. The bank has also raised its deposit rates to 9.75 percent, which is 25 bps for tenures between four and five years, and to 8.75 percent, 50 bps higher, for tenures of five to ten years, for a limited period up to March 31.
Existing housing loans under priority sector, all existing education loans, agriculture production loans less than Rs 3 lakh, and new education loans up to Rs 4 lakh stand excluded.