New Delhi: India’s largest public sector bank, State Bank of India (SBI), has lifted its base rate by 0.10 percent, or 10 basis points (bps). From December 15, 2021, the new rate of 7.55 percent per year will be in effect.
The bank had already decreased the benchmark rate by 5 basis points to 7.45 percent in September.
The Reserve Bank of India establishes the minimum interest rate, which is used by all banks as their standard rate. Banks are prohibited from lending at a rate lower than the central bank’s set base rate.
SBI has also increased the interest rate on fixed deposits of more than Rs 2 crore, effective December 15, 2021.
The increased interest rates will apply to new deposits as well as those that are about to mature. The interest rates on NRO term deposits will be aligned with those on domestic term deposits. According to the SBI website, these interest rates will also apply to domestic term deposits held by cooperative banks.
SBI has kept the interest rates on FDs under Rs 2 crore unchanged.
The Reserve Bank of India (RBI) announced its decision to keep interest rates unchanged on December 8, 2021. The repo rate is currently at 4%, while the reverse repo rate is at 3.35 percent. For the ninth consecutive monetary policy review meeting, the RBI kept key interest rates unchanged. The current 4-percentage-point repo rate is the lowest since April 2001.