New Delhi (Agencies): Following the Reserve Bank’s decision to hike policy rate, the State Bank of India on Friday raised lending and deposit rates on select maturities by 25 basis points.

The country's largest lender, issuing a statement, revised the base rate or the minimum lending rate 25 basis points to 8.25 per cent.

With the increase in base rate, all kinds of loans excluding housing and auto loans would be dearer by at least 25 basis points (0.25 per cent). SBI's Benchmark Prime Lending Rate (BPLR) for the existing customers has been increased by 25 basis points to 13 per cent. The bank has also increased fixed deposit rates on two select maturities by 25 basis points.

Both 555 days and 1,000 days fixed deposits would attract 9.25 per cent from existing 9 per cent. The new rates
would be effective from February 14.

Banks have been raising interest rates following a 0.25 percentage point hike in short-term lending (repo) and
borrowing (reverse repo) rates announced by the Reserve Bank in its third quarterly review of monetary policy last month.

More than a dozen banks including Punjab National Bank, Bank of Baroda, Union Bank of India and Indian Overseas Bank has already revised interest rates since the third quarterly review of the monetary policy on January 25.

While the higher deposit rates would provide better returns to savers, rise in lending rate would increase the
EMIs for auto and home loan borrowers. Besides, corporate loans too would become expensive.