The State Bank of India (SBI) has revised its benchmark prime lending rate (BPLR) and base rate by 0.7 per cent and 8.7 per cent, respectively, on its loans, effective September 15.
SBI has raised its BPLR by 70 basis points to 13.45 per cent, making loan repayment linked to BPLR costlier. One basis point is a hundredth of a percentage point. The country’s largest lender had last revised its BPLR rate to 12.75 per cent in June.
Announcing the decision on its website Wednesday, SBI said, “Benchmark Prime Lending Rate (BPLR) revised as 13.45 per cent per annum with effect from September 15, 2022.” The bank has also raised the base rate by similar basis points to 8.7 per cent. This would increase the loan EMI amount for borrowers. SBI revises both the BPLR and the base rates on a quarterly basis. More banks are likely to follow suit and raise lending rates.
Loan rates have been on an upward trend, with the Reserve Bank of India (RBI) raising rates in the last four-five months. The hike comes ahead of RBI’s monetary policy meeting from September 28 to 30, in which it is expected to increase the rates further to calm inflation.
Recent Rate Revisions:
According to data available on the RBI website, as on August 30, 2022, there have been certain rate revisions.
The weighted average lending rate (WALR) on new loans of the Scheduled Commercial Banks (SCBs) has risen from 7.94 per cent in June 2022 to 8.18 per cent in July 2022.
WALR for new loans of public sector banks increased by 14 basis points (bps) to 7.46 per cent, and for private banks, it rose by 15 bps to 9.05 per cent in July.
Similarly, WALR on outstanding rupee loans of SCBs climbed from 8.93 per cent to 9.01 per cent in July, and by 5 bps and 10 bps for the public sector and private banks, respectively, in July.
Also, the median Marginal Cost of Fund-based Lending Rate (MCLR) of SCBs increased from 7.55 per cent in July 2022 to 7.65 per cent in August 2022.
For public sector banks (PSBs), it increased from 7.55 per cent in July to 7.65 per cent in August 2022; for private banks, MCLR increased by 3 bps to 8.53 per cent during the month.
Deposit Rates:
The weighted average domestic term deposit rate (WADTDR) for outstanding rupee term deposits of SCBs increased from 5.13 per cent in June 2022 to 5.22 per cent in July 2022.
For PSBs, it rose from 5.17 per cent in June 2022 to 5.27 per cent in July 2022, and for private banks, it increased from 5.25 per cent in June 2022 to 5.30 per cent in July 2022.
