Mumbai: All types of loans, including housing and auto are set to get dearer for both new and existing borrowers as country's largest lender SBI on Tuesday hiked lending rates by 75 basis points (bps). The hike is effective from May 12, SBI said in a statement.

Giving some breather to depositors, State Bank of India (SBI) also raised interest rates on fixed deposits of short term maturities by up to 225 bps.

SBI increased base rate, or the minimum lending rate, by 75 bps (0.75 per cent) to 9.25 per cent.

With this hike, SBI's BPLR goes up to 14 per cent. This will make equated monthly installments for existing loans dearer by at least 75 basis points.

Banks on rate hike spree

Since the Reserve Bank's decision to raise short-term key rates in its annual credit policy on May 3, banks have been on a rate hike spree.

Over a dozen banks, including Punjab National Bank, ICICI Bank, Oriental Bank of Commerce and Corporation Bank have raised interest rates in past one week.

Most of the banks hiked lending rates by 50 bps in the past one week.

SBI has taken a more aggressive stance by hiking lending rates by 75 basis points.

For depositors, interest rates have been hiked in maturities slab of up to 180 days to align this with the hike interest rate for savings bank accounts.

The Reserve Bank had upped the interest rates on savings bank accounts to 4 per cent from 3.5 per cent in its annual credit policy on May 3.

Interest rate for term deposit with maturity of 7-14 days will go up by 225 basis points to 6.25 per cent from existing 4 per cent, while 15-45 days fixed deposit will earn 125 bps
more at 6.25 per cent.

For term deposits of 46-90 days of maturity, interest rate has been increased by 75 basis points to 6.25 per cent. At the same time, 91-180 days fixed deposit will earn 7 per cent compared to 6 per cent.