SBI hikes interest rate by 0.5 percent

June 26th, 2008 - 7:52 pm ICT by IANS  

Mumbai, June 26 (IANS) The country’s largest public sector bank, the State Bank of India (SBI), Thursday hiked its benchmark prime lending rate (PLR) by 0.5 percent to 12.75 percent annually. The hike, which will make loans costlier, will be effective Friday (June 27), as per a decision taken by the SBI Asset Liability Committee, the bank’s chief financial officer Ashok Mukand told reporters.

The revised rates shall apply to all PLR-related lending and will restore the benchmark rate to the rate prevailing in January this year, he added.

SBI had hiked its PLR on April 8 this year by 75 basis points to to 12.25 percent per annum. The bank’s home loan portfolio alone is around Rs.380 million.

The SBI decision comes in the wake of the Reserve Bank of India’s (RBI) announcement of a 0.5 percent hike in its short-term lending rate to banks and cash reserve ratio requirements.

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