BUSINESS

SBI, UBI hike loan rates by 0.5%

Source:PTI
June 26, 2008
Home, auto and other retail loans from SBI and Union Bank of India will cost more, with the two public sector banks on Thursday announcing an identical 0.5 hike in their benchmark prime lending rates to protect margins.

Consequently, SBI's BPLR will go up to 12.75 from June 27, while that of UBI will move up 13.25 per cent.

While UBI also hiked deposit rates by 0.25 to one per cent across various tenures, SBI refrained from doing so.

The revision comes after RBI raised its key short term lending rate to banks and the cash reserve requirement to contain double-digit inflation. The central bank has hiked CRR by 1.25 per cent and the repo by 0.75 per cent since April.

Inflation touched a 13-year high of 11.05 per cent primarily fuelled by the unprecedented hike in global crude oil and commodity prices.

SBI and UBI had reduced their PLRs early this year and have now 'restored' their rates owing to the changed market conditions, both banks said.

The revisions in rates of SBI and UBI will come into effect from June 27 and July 1 respectively.

"We are now restoring our PLR which we had reduced some time back. All loans linked to the BPLR will come under the revision," SBI's chief financial officer Ashok Mukand told PTI.
Source: PTI
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