Key Points of SBI Base Rate Increase:
- SBI will raise its Benchmark Prime Lending Rate (BPLR) and base rate by 70 basis points and similar basis points, respectively.
- The increase in rates will come into effect on March 15 and will make loan repayment linked to BPLR costlier for borrowers who have taken loans at the base rate.
- SBI revises both the BPLR and base rate on a quarterly basis and last revised them in December 2022.
- Borrowers who have taken loans at the base rate will see an increase in their EMI amount.
- Most banks now provide loans on the External Benchmark Based Lending Rate (EBLR) or the Repo-Linked Lending Rate (RLLR).
- The increase in benchmark lending rates comes ahead of the Reserve Bank of India’s (RBI) monetary policy meeting on April 6, with economists expecting a 25-basis point rate hike in April to curb inflation.
- India’s headline and core inflation has been unrelenting, with annual retail inflation remaining above the central bank’s upper limit.
Details of SBI Base Rate Increase:
SBI to raise base rate and BPLR, EMIs set to go up
India’s largest lender, SBI, has announced an increase in its Benchmark Prime Lending Rate (BPLR) and base rate. Effective 15th March, the BPLR will be hiked by 70 basis points or 0.7% to 14.85%, while the base rate will be raised by similar basis points to 10.10%. This revision will make loan repayment linked to BPLR costlier for borrowers. The bank revises both the BPLR and base rate on a quarterly basis, with the last revision in December 2022.
Borrowers who have taken loans at the base rate will see an increase in their EMI amount. However, most banks now provide loans on the External Benchmark Based Lending Rate (EBLR) or the Repo-Linked Lending Rate (RLLR).
The increase in the benchmark lending rates comes ahead of the Reserve Bank of India’s (RBI) monetary policy meeting on 6th April. Economists expect the RBI to deliver the expected 25-basis point (bps) rate hike in April to curb inflation. India’s headline and core inflation has been unrelenting, with annual retail inflation remaining above the central bank’s upper limit.
Gaura Sen Gupta, economist with IDFC First Bank, said, “We continue to expect the RBI to hike policy rates by 25 bps in April. The January and February prints will only increase the (RBI’s) concerns on core inflation showing persistence.” Madhavi Arora and Harshal Patel, economists at Emkay Global, wrote in a note, “The RBI will continue to remain non-committal on the future rates path, as the fluid global situation demands frequent macro re-assessments.”
About SBI:
Headquartered in Mumbai, SBI is a Fortune 500 company and the largest and oldest bank in India with a history spanning over 200 years. As an Indian multinational and public sector banking and financial services statutory body, SBI has a prominent presence in the country.
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