The nation's largest lender State Bank of India (SBI) will raise the base rate and Benchmark Prime Lending Rate (BPLR) from Wednesday. The bank revises both the BPLR and the base rate on a quarterly basis.
BPLR will be hiked by 70 basis points or 0.7 per cent to 14.85 per cent, effective 15 March, according to the bank's website.
The announcement would make loan repayment linked to BPLR costlier. The current BPLR rate is 14.15 per cent. It was revised last in December 2022.
The bank will also hike the base rate by similar basis points to 10.10 per cent, effective Wednesday. The current BPLR rate is 9.40 per cent. It was revised last in December 2022.
EMIs to go up
The EMI amount for the borrowers who have taken loans at the base rate would go up.
These are the old benchmarks on which banks used to disburse loans. Now most of the banks provide loans on the External Benchmark Based Lending Rate (EBLR) or the Repo-Linked Lending Rate (RLLR).
The increase in the benchmark lending rates comes weeks ahead of the Reserve Bank of India's (RBI) monetary policy meeting on 6 April, which is again expected to hike rates to curb inflation, even as global markets lowered rate hike bets from the US next week following the banking crisis.
The RBI monetary policy committee is likely to deliver the expected 25-basis point (bps) rate hike in April, economists said on Tuesday.
"We continue to expect the RBI to hike policy rates by 25 bps in April. The January and February prints will only increase the (RBI's) concerns on core inflation showing persistence," said Gaura Sen Gupta, economist with IDFC First Bank.
India's headline and core inflation has been unrelenting, with data post market close on Monday showing annual retail inflation remained above the central bank's upper limit, easing only slightly to 6.44 per cent from January's 6.52 per cent.
"We expect the focus to remain on reducing inflation, both globally and in India," said Sen Gupta.
"The RBI will continue to remain non-committal on the future rates path, as the fluid global situation demands frequent macro re-assessments," Madhavi Arora and Harshal Patel, economists at Emkay Global wrote in a note.
SBI shares were trading 1.10 per cent lower at ₹523.85 apiece on the NSE in Tuesday's late noon deals.
This article taken by livemint.com
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