MUMBAI: State Bank of India (SBI) on Saturday hiked the home loan rates and domestic term deposit rates for various maturities with effect from May 1.

The fixed home loan rate has gone up by 25 basis points. The interest rate on loans for up to five years is raised to 9.50 per cent from 9.25 per cent, SBI informed the Bombay Stock Exchange (BSE). Housing loans for a period above five years and up to ten years will attract an interest rate of 9.75 per cent against 9.50 per cent.

The bank increased its benchmark prime lending rate, State Bank Advance Rate (SBAR), by 50 basis points to 10.75 per cent from 10.25 per cent. The floating rates linked to SBAR for a loan period up to five years will be two per cent below SBAR with minimum 8.75 per cent instead of 1.5 per cent below SBAR with minimum 8.5 per cent annually. For loans above five years but less than ten years, the interest rate will be 1.50 below SBAR with minimum 9.25 per cent instead of a minimum of 8.75 per cent.

For loans of above ten years and up to 15 years, the minimum floating rate will be 9.25 per cent against 9 per cent at present. Also, for loans of above 15 years and up to 20 years, the floating rates will be minimum 9.75 per cent, half a percentage point more than the existing rate of 9.25 per cent, SBI said.

Super saver term deposit

The bank also launched a new long-term deposit scheme — Super Saver Term Deposit — wherein deposits will be accepted for maturity of `6 years and up to 10 years' with an interest rate of 7.5 per cent annually, SBI stated in a press release.

"The interest rate payable to senior citizens (60 years and above) will be 0.50 percentage point above the rate applicable to other depositors (that is, 8 per cent annually). In the case of premature withdrawal of deposits under the scheme, the interest rate will be two per cent below the rate applicable for the period deposit has remained with the bank (as against 0.50 percentage point in respect of other term deposits),'' SBI stated. Interest rates on short term deposits of maturity between 46 and 179 days and 180 days and less than one year have been revised upwards by 25 basis points to five per cent and 50 basis points to six per cent, respectively.

The rates on term deposits of maturity between one and three years and three and five years have been revised upwards by 25 basis points to 6.25 per cent and 6.50 per cent, annually, respectively. The interest rates on term deposits of maturity five years-ten years have been raised by 50 basis points to 7 per cent.

Senior citizens will receive half a percentage higher interest rates above the card rate for deposits with maturity of one year to less than three years, three years to less than five years and five years and up to ten years. The rates will be 6.75 per cent, 7 per cent and 7.5 per cent annually, respectively.

Hike in home loan rates

Our Delhi Special Correspondent writes:

Effective May 1, home loans extended by Oriental Bank of Commerce (OBC) will be costlier, the bank Chairman and Managing Director K. N. Prithviraj said on Saturday. The bank had decided to do away with the fixed rate home loans for beyond ten years, while increasing the interest rates by about 25 and 100 basis points from next month.

As per the revised schedule, home loans up to five years will be available at an interest rate of eight per cent as compared to 7.25 per cent at present, while those between five to ten years will be charged at the rate of 8.25 per cent against the existing 7.75 per cent. Home loan customers for a period beyond ten years will have to pay a floating interest rate of 8.5 per cent against the current eight per cent.

The bank also revised the fixed interest rates for home loans to 9.25 per cent from the existing 8.25 per cent for loans up to five years and to 9.5 per cent from 8.75 per cent for loans between five and ten years.

At present, the bank is charging nine per cent for home loans beyond ten years, which will be stopped from next month. This, Mr. Prithviraj said, was in keeping with the Reserve Bank of India's norms of not allowing banks to take deposits of more than ten years.

PTI reports from Mumbai:

Union Bank

Taking into account the current pressure on cost of funds, Union Bank of India on Saturday revised upward its Benchmark Prime Lending Rate (BPLR) by 0.50 percentage point from 10.75 per cent to 11.25 per cent effective from May 1. The increase will impact advances with floating interest rate structures, the bank said in a release.

Punjab National Bank

Punjab National Bank increased the prime lending rate by 0.50 percentage point to 11.25 per cent from May 1.

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