State Bank of India has hiked its interest rates by 50 basis points on all credits linked to prime lending. This means that car loans along with home loans would be expensive in the country. This was the much anticipated move as RBI had hiked its Repo rate and CRR for banks in India. SBI is one of the first ones to announce the hike in auto interest rates.
According to the State Bank Chairman, OP Bhatt, the bank has decided to increase the interest rates on all the loans directly linked to PLR by 0.5 percent. Other nationalised and private sector banks have also decided to revise their interest rates on similar lines. Allahabad bank has increased its prime lending rates by 0.5 percent to 13.50 percent with effect from July 01, 2008.
Bank of India has increased its interest rate to 13.25 percent while Dena Bank would be charging 13.50 percent. It has also increased its interest on term deposits by 0.25 to 0.75 percent for different maturities ranging from 180 days or above. The rates shall be effective from July 04, 2008.
Hike in interest rates by ICICI and HDFC bank shall be effective from July 12, 2008 and they have also increased their deposit rates by 0.5 to one percent.
