Signalling a hardening interest rate regime across the banking system, State Bank of India, the leader in credit and deposit markets, on Wednesday steeply raised the retail and bulk deposits rates for various maturities by up to 0.75% with immediate effect.

SBI Chairman Rajnish Kumar

Mumbai:

When it comes to the bulk term-deposit rates, this is the third pricing revision in past four months by the bank.

Under the present loan pricing mechanism that is based on the marginal cost of funds-based lending rates, any upward revision in cost of funds automatically leads to a pricing revision in loans.

For retail deposits, below ₹1 crore, rates have been increased by up to 0.50 per cent, while for deposits maturing in one year to less than two years, the pricing has been raised by 0.15 per cent to 6.40 per cent from 6.25 per cent earlier.

All the new rates come into force immediately, the bank said in a statement.

It can be noted that many banks have been increasing their deposit and lending rates since the last quarter.