SBI to hike car, personal loan rates by 0.75 per cent
08 Mar 2007
Mumbai: The State Bank of India (SBI), the country's largest bank, has announced a 0.75 per cent hike car and other personal loan rates, excluding housing and education.
The hike, to be announced in a few days, will not affect existing housing and educational loans as well as new educational loans up to Rs4 lakh. Similarly, all existing and future agriculture production loans less than Rs3 lakh are also excluded from the rate hike.
"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," Ashok Aggarwal, MD of SBI, said on the sidelines of the launch of electronic system for excise and service taxes.
While some loan rates may rise by one per cent and some by 0.50 per cent, the average would be 0.75 per cent, he further clarified.
The announcement comes amid reports that ICICI and Kotak are increasing auto interest rates by 0.75-1 per cent this weekend.
SBI had announced 0.75 per cent hike in its prime lending rate to 12.25 per cent last month, following the increase in cash reserve ratio by the Reserve Bank.
SBI had also raised interest rates on some of its deposit schemes.
Aggarwal, however, said that interest rates are unlikely to harden further as the rate cycle in the economy has almost peaked and the rates are likely to stabilise at these levels.
SBI's loan growth could be 20 per cent in the year to March 2007, he said, adding the bank's deposit growth could be in the same range.
The RBI has been raising its lending rates since late 2004, and it has raised the cash reserve ratio twice since December to curb rapid credit expansion and inflation. But bank lending has continued to grow at an annual rate of about 30 per cent, while annual inflation was running at 6.05 per cent in mid-February.
