The country’s largest lender, State Bank of India, hiked the Benchmark Prime Lending Rate (BPLR) by 70 basis points (or 0.7 per cent), to 13.45 per cent, on Wednesday.
The announcement would increase the cost of loan repayment tied to the BPLR. The BPLR rate is currently 12.75 per cent. It was last updated in June.
“Benchmark Prime Lending Rate (BPLR) revised as 13.45 per cent per annum with effect from September 15, 2022,” the SBI posted on its website.
The bank also increased the base rate by a comparable amount, to 8.7 per cent, starting Thursday.
Borrowers who took out loans at the base rate will see their EMIs rise.
These are the old standards used by banks to make loans. Most banks now make loans based on the External Benchmark Based Lending Rate (EBLR) or the Repo-Linked Lending Rate (RLLR).
The BPLR and the base rate are both revised quarterly by the bank. The SBI’s lending rate cut is anticipated to be followed by other banks in the coming days.
The rise in benchmark lending rates comes just weeks before the Reserve Bank of India’s (RBI) monetary policy meeting, at which rates are expected to be raised again to combat inflation.