Loans are going to get more expensive as we enter 2022. The largest public sector bank in India, State Bank of India (SBI), has increased base rate by 10 basis points (bps). This is the first hike in rates in over 2 years.
The new rate of 7.55 percent per year is effective from December 15, 2021. Earlier, in September, the bank lowered the base rate by 5 basis points, to 7.45 per cent.
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SBI’s move comes days after the Reserve Bank of India (RBI) kept its rate outlook accommodative in its bi-monthly policy review meeting but also taking cue from the US central bank that forecast 3 rate hikes next year and the Bank of England who on Thursday already raised rates due to price rise that is at a 10-year high.
SBI however giving some cheer to a 'select set' of depositors hiked the interest of fixed deposits above Rs 2 crore, with effect from 15 December 2021.