Date- April 20, 2011 | Place- Mumbai
The largest lending bank in India, the State Bank of India (SBI), on Tuesday, 19th of April announced an increase of 25 basis points in its lending rates. The new lending rates would now stand at 8.50% effective from April 25th, SBI has confirmed.
With this, SBI has made loans more expensive for existing as well as new customers or borrowers. However this comes as no surprise after the main competitors of SBI, the ICICI had increased its rates in February. The Allahabad Bank and Punjab and Sind bank had increased its rates too, in the recent past.
It is to be mentioned that the SBI’s increase in rates comes almost immediately after the reports showed that the inflation in the country has rose up to 8.98% by end of March proving the RBI prediction that it would rise only to 8%. It is also a month after The Reserve Bank of India Bank increased its lending and borrowing rates by 25 basis points to 6.75% and 5.75% respectively. The RBI now is expected to raise policy rates by at least 25 basis points in its annual monetary policy on 3rd May, which will lead to further increase in interest rates.