Joining the rate-hiking spree, State Bank of India (SBI), the largest commercial bank in the country, on Thursday increased lending rates by 25 basis points (bps), making home, auto and other loans more expensive. However, cheering savers, the bank also raised deposit rates on some tenures and eased penalty on premature closure of deposits.

The bank revised the base rate or the minimum lending rate upwards by 25 basis points, or 0.25 per cent, to 9.50 per cent with effect from July 11. It has also raised its benchmark prime lending rate (BPLR), used to determine floating interest rate loans, to 14.25 per cent from 14 per cent. This will lead to a rise in the EMIs of existing customers.

The interest rates on fixed deposits with a maturity period of 1-2 years has gone up from 8.25 per cent to 9.25 per cent. The new deposit rates would also be effective from July 11. The decision follows the rate hike announced by the Reserve Bank in its policy review last month.

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