State Bank of India, the country’s largest bank, raised both its deposit and lending rates, taking its effective home loan rate to 10.25%. ICICI Bank, the second largest bank, raised its rates. SBI’s home loan customers would pay 100 basis points (bps) above its base rate of 9.25%; thus the effective rate becomes 10.25%. SBI also raised its fixed deposit rates by as much as 225 basis points (100 basis points=1%), all of which were in maturities of up to six months. The bank also raised its prime lending rate (PLR) by 75 bps to 14% now. All these hikes are effective Thursday. The hike in FD rates is sure to cheer those who prefer the safety of bank FDs. From May 12, SBI will pay at the rate of 6.25%.
