Mumbai: Largest public sector bank in the country, State Bank of India (SBI) has hiked its loan rates. The nationalized bank has increased the external Benchmark based lending rates (EBLR) and Repo-Linked Lending Rate (RLLR) by 50 basis points. The new rates are at to 8.55% and 8.15%, respectively. The new rates came into effect on Saturday, October 1.
The rate hike was taken as the Reserve Bank of India hiked its repo rate by 0.5% to 5.90%. Repo rate is the key interest rate at which the RBI lends short-term funds to commercial banks. Repo rate is used by monetary authorities to control inflation.
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Banks charge additional Credit Risk Premium (CRP)over the EBLR and RLLR while extending loans to borrowers. with the hiked rates, EMIs of home loans, vehicle loans and other loans will become costlier.
Earlier, the leading mortgage lender in the country, HDFC hiked its lending rate by 50 basis points. Bank of India and ICICI bank have also announced an interest hike.
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