Public sector lender, State Bank of Indore has raised its lending rate by 50 basis points. 1 basis point is equal to 0.01 percentage points.
The rate hike means increased cost of home, auto and other loans for the borrowers.
The bank which is an associate bank of the country's largest lender, State Bank of India and soon to merge with it has taken the decision to hike lending rates after SBI has hiked its BPLR by 50 basis points to 12.25%.
The merger process of the two banks is going to initiate from August 26. SBI currently holds 98% stake in State Bank of Indore.
After this merger, SBI will be left with five associate banks-State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, the State Banks of Bikaner and Jaipur, Mysore and Travancore are listed companies.