State Bank Of India

The country’s biggest lender, State Bank of India (SBI), announced a token increase in its base rate, softening the blow of an increase in cost of funds for its new borrowers.

SBI’s new base rate, the benchmark for all other loans, will be 7.6 per cent for the quarter till December 31, compared with 7.5 per cent. This is SBI’s first increase in base rate since the new lending rate system was introduced on July 1, even as the Reserve Bank of India (RBI) raised its key repo rate by 75 basis points in the same period.

The bank expects to maintain its net interest margin after the increase, declining to be identified. The bank has also increased lending rates for its existing borrowers under the benchmark prime lending rate by 25 basis points to 12.50 per cent. Both the rates come into effect on October 21. The bank, which raised its deposit rates in mid-August and September-end, left its deposit rates unchanged.