MUMBAI : The country's largest bank, State Bank of India, has spared borrowers taking home,auto and education loans while raising its prime lending rate (PLR) by 100 basis points (bps) to 13.75% from 12.75%. The new rates will come into effect from Tuesday (August 12). Simultaneously, SBI has announced a hike in deposit rates by 25 bps to 75 bps. Even after the latest rate hike, SBI’s PLR will be among the lowest in the industry, with most government-owned banks pegging their benchmark lending rate in the band of 14-14.25% while private and foreign banks have fixed it at 15% and above.

Announcing the hike in rates, SBI said that it would not pass on the rate hike to the existing and new home loan borrowers with limits up to Rs 30 lakh. The bank charges home loan borrowers in the range of 10.5-11.25% depending on the tenure and the size of the loan. Similarly, its existing education and auto loan customers would also not be impacted by the rise in PLR. For new auto loans borrowers, the bank has raised PLR only by 50 bps.

On the deposit front, SBI will offer 10% for deposit up to two years which is up from 9.5%. For 2-3 years, bank will continue to offer 9.5%. For 3-5 years, it will now offer 9.75% against 9%. And for 5-10 years, it will offer 9.25% from 9%. Senior citizens would be paid 50 bps over the other rates offered to other deposits. Meanwhile, this is first time SBI has raised its PLR after other state-owned banks had taken a lead in raising their benchmark rates.

Earlier, most banks used to wait for SBI to take a decision on revision lending rates before taking any action. The hike in the lending rate follows the 25-bps increase in the cash reserve ratio to 9% and 50-bps hike in repo rate to 9%. CRR is a portion of deposits that banks have to park with RBI and repo rate is the rate at which banks borrow from RBI