SBI raises lending rates

SBI chairman OP Bhatt had recently said,The bank will have to hike its lending rates as the banks cost of deposits,which forms a significant component for calculation of our base rate,has been constantly going up since the middle of the past quarter. Liquidity is not only tightening,but has remained volatile too. We will have to go for an increase in our base rate to protect our margins. S S Ranjan,chief financial officer,SBI,said that 60 per cent in terms of value of the loan book of the banks borrowers have shifted to the base rate so far.

Earlier,ICICI had also upped its base rate,which is a floor for lending rates,by 25 basis points to 7.75 per cent. A number of lenders raised their base rates in the last one month. Punjab National Bank hiked the minimum rate of interest on loans to 8.5 per cent from 8 per cent,while Axis Bank,Kotak Mahindra Bank and foreign lender Standard Chartered Bank raised their base rates by up to 25 basis points. Besides,HDFC Bank and Bank of Baroda also raised their benchmark lending rates by up to 50 bps.