Mumbai: SBI and ICICI Bank raised their lending and deposit rates on Friday. While the hike in lending rate would make auto, home and commercial loans expensive, increase in deposit rates will ensure better returns for depositors.
HDFC bank is hiking its interest rates by 1 per cent from Saturday.
SBI on Friday announced special lower home loan rates for the first few years which are, however, higher than the lender's much-flayed but most popular teaser rates.
SBI and ICICI Bank raised their lending and deposit rates on Friday. While the hike in lending rate would make auto, home and commercial loans expensive, increase in deposit rates will ensure better returns for depositors.
HDFC bank is hiking its interest rates by 1 per cent from Saturday.
Under the new special scheme, home loans of up to Rs 75 lakh attract 8.50 per cent interest rate for the first year and 9.25 per cent for the next two years.
The special rates are valid between January 3 and March 31, 2010.
The new formula announced on Friday involves a card rate which is higher than bank's base rate or the minimum lending rate and then places a discount on card rate. The same formula is applicable on auto loans as well.
Earlier, SBI was offering a teaser rate of 8 per cent for the first year and 9 per cent for the next two years. These were not linked to the base rate.
"This is not a continuation of our old scheme...the difference is that we have linked the rates of interest to the base rate," a senior bank official told PTI after the announcement of the new rates.
Posturing an aggressive stand to garner a larger market share, State Bank of India (SBI) in February 2009 launched lower rates for the initial years of the credit period which soon came to be known as teaser rates.
These were introduced when SBI was flush with over Rs 1,00,000 crore of excess liquidity, bank chairman O P Bhatt had said.
(With inputs from PTI)
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