Loans from State Bank of India will get dearer. The country's largest bank has hiked its base rate and benchmark prime lending rate by 25 basis points each, with effect from April 25.

This move will lead to loans, across segments, including home and auto loans getting costlier.

The revised Base Rate is 8.5 per cent and the BPLR 13.25 per cent, the bank said in an announcement on the BSE, on Tuesday. The bank, however, left interest rates on term deposits unchanged.

Currently, SBI's lending rates are among the lowest in the industry. The Base Rates of most other public sector banks are in the range of 9-9.5 per cent. SBI had last hiked the Base Rate and BLPR by 25 basis points in February. This latest hike comes ahead of the annual monetary policy announcement, by the RBI, scheduled for May 3. Given the high inflation, the RBI is likely to hike short-term repo and reverse repo rates by 25 basis points.

According to Ms Aditi Thapliyal, Banks analyst at Execution Noble, the rate hike by SBI has normalised its lending yield curve in line with trends seen earlier in private sector peers. Private sector banks have been ahead of their public sector counterparts in raising their lending rates. For instance, HDFC Bank has hiked its base rates by nearly 150 basis points since June last year to 8.7 per cent, while for SBI until today's hike to 8.5 per cent, the increase was only 75 bps, she said. “The increase is a positive for net interest margins as it means higher funding costs being passed on to borrowers. However, we wouldn't be so hasty so as to make dire predictions on SBI's credit directly.''

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