The bank has revised the base rate or the minimum lending rate to 10 percent from 9.80 percent, SBI said in a statement. (Agencies)
At the same time, the Benchmark Prime Lending Rate (BPLR) was also raised by 0.20 percent from 14.55 percent to 14.75 percent.
Upward revision in the lending rate by SBI may prompt others public and private sector banks to follow suit. The decision comes a day after HDFC Bank raised the base rate by 0.20 percent to 10 percent.
Earlier this month, SBI raised fixed deposit rate by 0.2 percent on select maturity. With the revision, term deposit between 180-210 days less than Rs 1 crore now earn 7 percent against 6.80 percent earlier.
Last week, RBI raised short-term lending (repo) rate by 0.25 percent to 7.75 percent, making cost of fund expensive for the banks. At the same time, the RBI lowered marginal standing facility (MSF) rate by a similar margin to 8.75 percent.
Accordingly, the bank rate was reduced to 8.75 percent with immediate effect. Consequently, the reverse repo rate is adjusted upward to 6.75 percent.
The RBI has left unchanged other rates such as the cash reserve ratio at 4 percent and the mandatory holdings in government securities and other liquid assets as a solvency measure - Statutory Liquidity Ratio (SLR)- at 23 percent.
SBI had last raised base rate by 0.10 percent to 9.80 percent in September this year.
The bank has revised the base rate or the minimum lending rate to 10 percent from 9.80 percent, SBI said in a statement.