New Delhi: The country's largest lender, the State Bank of India (SBI) on Wednesday said it will shortly raise car and other personal loan rates, excluding housing and education, by an average of 0.75 per cent.
"We have announced hike in benchmark prime lending rates by 75 basis points. Consequently, we will be raising rates of all (personal) loans, except for housing and education, by 75 basis points on an average," SBI MD Ashok Aggarwal told reporters on the sidelines of the launch of electronic system for excise and service taxes.
He, however, clarified that some loan rates may rise by one per cent and some by 0.50 per cent, but the average would be 0.75 per cent. The interest rate hike would be announced in a few days, he added.
Aggarwal's statement came amid reports that ICICI and Kotak are increasing auto interest rates by 0.75-1 per cent this weekend.
Pursuant to increase in cash reserve ratio by the Reserve Bank, SBI had announced 0.75 per cent in its benchmark prime lending rate to 12.25 per cent last month.
However, all the existing housing and educational loans as well as new educational loans up to Rs 4 lakh are excluded from the hike. Similarly, all the existing and future agriculture production loans less than Rs three lakh are excluded from its impact. SBI had also raised interest rates on some of its deposit schemes.
Aggarwal said hardening interest rate cycle has peaked in the economy and the rates are likely to stabilise at these levels. "Usually, interest rates rise towards the end of year and stabilise at the beginning of the year because of slack season," he said.
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