Country’s largest lender State Bank of India (SBI) indicated it could hike interest rates by up to 50 basis point next week.
“It (interest rates review) is happening next week because asset liability committee has to meet next week. So you can expect some transmission next week or the week after …25-50 basis points perhaps,” SBI Chairman,Pratip Chaudhary said on the sidelines of board meeting.
Banks have been raising interest rates following a hefty 50 basis points increase in key policy rates undertaken by RBI in its first quarterly review of monetary policy last month to tame inflation.
Since then about two dozen banks have already raised interest rates following July 26 policy rate hike by the apex bank.
Many banks including HSBC,United Bank and Dena Bank –had hiked their lending and base rates by up to 50 basis points,following the recent tightening by the Reserve Bank to tame inflation which is hovering at 9.44 per cent.
On the other hand,state-run Indian Overseas Bank (IOB) upped its term-deposit rates by up to 75 basis points.
Hongkong and Shanghai Banking Corporation India (HSBC) had revised upwards its base rate,the minimum lending rate,by 50 basis points to 9.75 per cent.
Further,depositors with HSBC,one of the country’s oldest foreign banks ,will now get better returns on their savings as rates have been hiked by 50 basis points.
With this,HSBC India will now offer an interest of 9 per cent per annum to its customers for a term of 365 days and 9.5 per cent to senior citizens.
Besides,PSU lender United Bank of India increased its lending rate from today.
From now,the bank’s base rate would stand at 10.60 per cent and benchmark prime lending rate(BPLR) at 14.85 per cent.
State-run lender Dena Bank had hiked its minimum lending rate or the base rate by 50 basis points to 10.70 per cent.
It had also increased interest rates on loans given under Benchmark Prime Lending Rate (BPLR) by a similar 50 basis points to 15.75 per cent.
Dena Bank had said it has raised interest rates on deposits by 50-150 basis points depending on their maturity level.
The hike in interest rates come after the Reserve Bank raised its key policy rates last week by a hefty 50 basis points to check high inflation.
The short-term lending (repo) rate of RBI now stands at 8 per cent and the short-term borrowing (reverse repo) rate at 7 per cent.
Subsequently,the interest rate under the Marginal Standing Facility,an additional borrowing window,has gone up to 9 per cent from the earlier level of 8.5 per cent.