Major lenders, including State Bank of India, ICICI Bank and HDFC Bank have raised their lending and deposit rates by up to one percentage point on the eve of the New Year. While the hike in lending rate will make auto, home and commercial loans expensive, increase in deposit rates will ensure better returns for depositors.

In line with market trend, SBI announced increase in its base rate or the minimum lending rate by 40 basis points to 8 per cent. The fixed deposits with SBI will fetch high interest. SBI also raised the benchmark prime lending rate by 25 basis points to 12.75 per cent. The new rates will come into effect from Monday.

HDFC Bank has decided to increase its Base Rate by 25 basis points to 7.75 per cent from today.

ICICI Bank has announced an increase of 0.5 per cent in the Base Rate with effect from Monday. The revised rate will be 8.25 per cent as against 7.75 per cent at present.

Private sector lenders Kotak Mahindra Bank and Dhanlaxmi Bank have also increased base rates by up to 75 basis points. Kotak Mahindra Bank hiked base rate and Benchmark Prime Lending Rate (BPLR) by 0.25 per cent each. With the increase base rate would go up to 8.25 per cent.

Dhanlaxmi Bank also announced an increase of 0.75 per cent in its base rate and BPLR. Base rate will be revised to 8.25 per cent from the current 7.50 per cent while BPLR will be changed to 17.25 per cent from today.

Many banks, including Union Bank, Punjab National Bank, Bank of India, IDBI Bank, Indian Bank, Indian Overseas Bank, Allahabad Bank, Dena Bank and Standard Chartered Bank have already hiked their base rates recently.