SBI hikes lending rate by 25bps, deposit rates up too

India's largest lender State Bank of India hiked its base rate and benchmark prime lending rate by 25 basis points to 9.50% and 14.25% respectively.
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Jul 08, 2011, 12.24 PM | Source: Moneycontrol.com

SBI hikes lending rate by 25bps, deposit rates up too

India's largest lender State Bank of India hiked its base rate and benchmark prime lending rate by 25 basis points to 9.50% and 14.25% respectively.

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SBI hikes lending rate by 25bps, deposit rates up too

India's largest lender State Bank of India hiked its base rate and benchmark prime lending rate by 25 basis points to 9.50% and 14.25% respectively.

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SBI hikes lending rate by 25bps, deposit rates up too
Moneycontrol Bureau

India’s largest lender the State Bank of India hiked its base rate and benchmark prime lending rate by 25 basis points to 9.50% and 14.25% respectively. It has also increased its deposit rates by 25-100 bps on various maturities after tweaking some period of maturities.

A host of banks including ICICI Bank , Canara Bank , Corporation Bank and ING Vysya Bank have raised their lending rates recently.

Bank

Base rate (%)

BPLR (%)

Hike (basis points)

State Bank of India

9.50%

14.25

25

ICICI Bank

9.50

18.25

25

Indian Overseas Bank

10.25

14.50

25

Corporation Bank

10.25

Not yet happened

35

Dena Bank

10.25

15.25

25

Canara Bank

10.25

14.50

25

ING Vysya Bank

9.70

18.25

25

 

 

 

 

 

 

 

On deposit front, the lender hiked its rate to 7% from 6.25% for maturities of 7-90 days. For scheme of 1 year to less than 2 years, the rate rose to 9.25% from 8.25%. Longer term maturities like 5-10 years, rate rose to 9.25% from 8.50%.

On June 16 policy, the Reserve Bank of India (RBI) raised its key lending rates including repo and reverse repo by 25 bps each. So far in FY12, the central bank has hiked rates by 75 bps. Since April, 2010; it hiked rate by 27 bps. The purpose is to contain rising inflation by contracting credit growth. It has projected 19% credit growth in 2011-12 as against 20% in 2010-11.

According to the latest RBI data, bank loans grew by 49,817 crore to Rs 39,24,193 crore between April and June 17. Loans expanded by Rs 61,148 crore in the same period last year.

In another development, the bank's chairman Pratip Chaudhuri said that the lender will seek the government's nod to raise Rs 20,000 crore through the rights issue within this month.

Read this: Will seek govt's nod for rights issue this month, says SBI

"Draft proposal (for the rights issue) is with us. We are going to submit it this month to the ministry," he told reporters.

The government, which owns 59.4% in the bank, will have to contribute up to Rs 12,000 crore to subscribe to the issue. It had earlier announced its intention of coming out with the rights issue in the last quarter of FY11.

The bank had successfully raised over Rs 16,000 crore through a rights issue in 2008.

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