There is bad news for the customers taking loan from State Bank of India (SBI). The bank has increased its base rate by 10 basis points (bps).
That is, now the base rate of the bank will increase by 0.10 percent and will now be 7.55 percent. This move by SBI is set to make loans a bit costlier for existing borrowers. The new rates have become effective from December 15, 2021.
Earlier in September, the bank had reduced the base rate by 5 basis points to 7.45 per cent.
Along with the base rate, the bank has also decided to increase the prime lending rate from 10 per cent to 12.30 per cent. With an increase in the base rate, interest rates will become more expensive than before.
Apart from this, SBI has also increased the interest on FDs above Rs 2 crore with effect from December 15, 2021.
what is base rate
Base rate is the lowest level of interest rates offered by the bank. The right to fix the base rate rests with the banks. No bank, be it private or government, can offer loans below the base rate. All private and government banks consider the base rate as standard. Loans etc. are given on this basis.
34 percent share in the loan market
SBI is the largest player in the home loan sector. SBI holds 34 percent of the market. SBI has disbursed loans up to Rs 5 lakh crore. SBI has a target of taking this figure to 7 lakh crores by 2024.
cut in septemberÂ
Earlier in September, State Bank had revised the base rate. The base rate was fixed at 7.45 per cent with effect from September 15. Now the new base rate has increased by 0.10 percent to 7.55 percent.
Earlier, State Bank had announced to reduce the ‘Marginal Cost of Funds Based Lending Rate’ (MCLR) on short-term loans by 5 to 10 basis points. These new rates were implemented from 15 September 2021.
The benefit was available on EMI. Home loans which are linked to MCLR, their EMI gets reduced.
