SBI increases lending rate by 50 basis points post RBI's repo rate hike; Axis bank also raises interest rates on FDs

SBI has announced to hike lending rate by 50 basis points after RBI increased repo rate on Friday to 5.90%. Joining the league, Axis bank has also increased interest rates on FDs under Rs 2 crore.

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New Delhi: Largest lender of India, State Bank of India (SBI) has decided to hike its external benchmark lending rate (EBLR) and repo-linked lending rate (RLLR) by 50 basis points. The new rates were effective from October 1. It is to be noted that RBI raised the repo rate fourth time continually since May by 50 basis points on Friday in the latest RBI’s Monetary Policy Committee (MPC). The current repo rate now stands at 5.90%.

SBI’s decision of hiking lending rate will spillover onto the customers, especially borrowers as borrowing gets costlier after it.

After the revision, SBI’s EBLR pegs at 8.55% and RLLR at 8.15%. Borrowers now need to pay high interest rate in comparison to previous one which was 8%. It may discourage many new borrowers to take loans or foray into investment.

Axis Bank’s FDs interest rate up to 6%

Following RBI’s repo rate hike, another private lender Axis bank has decided to increase its fixed deposit (FDs) interest rate under Rs 2 crore. According to the official website of Axis Bank, it is now offering interest rate of 6.15% for general public and 6.90% for senior citizens on the deposits maturing in 15 months to less than 2 years.

For deposits maturing in seven to 29 days, the Axis Bank is offering a 2.75 percent interest rate. On the other days, a 3.25 percent interest rate is offered on deposits with maturities between 30 and 36 days. A 3.75 percent interest rate is being offered by the private sector lender on deposits maturing in three to six months, and a 4.65 percent interest rate is being offered on deposits maturing in six to nine months.

According to the Axis Bank official website, customers whose savings mature in the next 15 months to two years would receive an interest rate of 6.15 percent, while those whose deposits mature in the following two to five years will receive an interest rate of 5.70 percent. The interest rate on deposits that mature in five to ten years is 5.75 percent.