After HDFC Bank, SBI increases lending rate by 20 basis points

TheEMIs for home, car and even personal loans are likely to go upas both private sector lender HDFC Bank and public lender State Bank of India have increased their minimum lending rate by 20 basis points to 10 percent.

Base Rate is the minimum rate below which banks are not permitted to lend.

HDFC Bank has increased its base rate by 20 basis points to 10 percent with effect from November 2 after the Reserve Bank of India (RBI) recently increased the repo rate, the interest rate at which the RBI lends money to commercial banks, by 25 basis points. Last week, HDFC also cutits deposit rates in short-term maturities ranging from 46 days to six months by 25 bps to 8.25%. One basis point is 0.01 percentage point.

The hike in HDFC Bank’s base rate means its minimum lending rate is now on par with ICICI Bank Ltd’s and Kotak Mahindra Bank Ltd’s 10% base rate, and higher than Canara Bank Ltd’s 9.95%.

India’s largest public sector bank State Bank of India today announced that it base rate too will go up by 0.20 percent to 10 percent effective from 6 November.

At the asset liability committee (ALCO) meet last week, Ranjan Dhawan, executive director, Bank of Baroda categorically ruled out any immediate hike