Loans from State Bank of India will become dearer as it has upped its key lending rate benchmarks by 25 basis points.
However, the bank's depositors have something to cheer about as fixed deposit rates have been raised by up to 100 basis points.
With effect from July 11, it will offer 9.25 per cent interest on all tenures, comprising four maturity buckets, beyond one year.
The base rate and the benchmark prime lending rate (BPLR) will also stand revised to 9.50 per cent (currently 9.25 per cent) and 14.25 per cent (14 per cent) respectively.
What this means is that new as well as existing borrowers, be they from the retail, SME or corporate segments, will have to shell out more to service their loans.
Previous hike in May
The bank had last increased its key lending rate benchmarks in May. Then it had marked up the base rate and BPLR by 75 basis points each to 9.25 per cent (from 8.50 per cent) and 14 per cent (13.25 per cent) respectively.
On Thursday, Punjab & Sind Bank (PSB) and Dhanlaxmi Bank too revised their lending rate benchmarks.
PSB increased its base rate and BPLR by 25 basis points each to 10.25 per cent and 14.75 per cent respectively. Dhanlaxmi Bank revised its base rate and BPLR upwards by 25 basis points each to 10.25 per cent and 19.25 per cent respectively.
With effect from July 1, 2010, all fresh lending is undertaken by banks at a mark-up to the base rate. BPLR linked lending was in vogue till June-end 2010.
After the RBI increased the repo rate (the rate at which RBI lends funds to banks) and the reverse repo rate (the rate that banks earn on surplus funds parked with RBI) by 25 basis points each in the mid-quarter monetary policy review in June, a host of banks revised their lending rate benchmarks.
Other banks
The banks that have increased their lending rates in the last fortnight include Canara Bank, ICICI Bank, Corporation Bank, Indian Overseas Bank and Dena Bank.