The country's top two banks, State Bank of India (SBI) and ICICI Bank, on Thursday announced 50-basis point increases in their minimum lending rates, or base rates, to 10 per cent. The rate rises are effective from Saturday.

The banks had kept their lending rates unchanged since early July. The rate increases are aimed at ensuring the effective transmission of the Reserve Bank of India's monetary policy actions. The central bank had increased key policy rates by 50 basis points on July 26. The rise was the eleventh in last 16 months.

SBI and ICICI Bank also raised their benchmark prime lending rates (BPLR) by 50 basis points. For SBI, the BPLR would now be 14.75 per cent, while for ICICI Bank, it would stand at 18.75 per cent. ICICI Bank's floating reference rate for consumer loans was also raised by 50 basis points to 15.75 per cent.

SBI had last raised its lending rate on July 11, while ICICI Bank had raised it on July 4.

Since the base rate was introduced in July 2010, SBI has raised the rate by 250 basis points. For ICICI Bank, the minimum lending rate has been increased by 225 basis points since its inception.

The base rates of other state-run lenders like Punjab National Bank and Bank of Baroda are currently 10.75 per cent. HDFC Bank, the country's second-largest private sector bank, has kept its minimum lending rate at 9.5 per cent.

SBI has also raised interest rates on domestic term deposits of 180-240 days maturity by 50 basis points to seven per cent. (Business Standard)