The increase in the Retail Prime Lending Rate (RPLR), on which it benchmarks the Adjustable Rate Home Loans (ARHL), is effective from April 1, an official statement said.

A company spokesperson said the rate hike is progressive, between 0.05 per cent to 0.20 per cent, with the lowest hike applicable to the low-ticket size loan.

A loan for under Rs 30 lakh by a woman borrower, which is the lowest rate offered by the lender, will now be available at 8.40 per cent, the spokesperson said, adding for others it will be 8.45 per cent.

Loans between Rs 30 lakh to Rs 75 lakh will be available at 8.55 per cent for women borrowers and 8.60 per cent for others, while those above Rs 75 lakh will be for 8.65 per cent for women and 8.70 per cent for others.

Despite no rate hikes by the Reserve bank, the liquidity squeeze has resulted in several banks hiking interest rate offerings since late 2017.

It started with the private sector lenders like Axis Bank, Yes Bank and Kotak Mahindra Bank hiking their marginal cost of funding-based lending rates, and gradually percolated down to all the banks in the system including the largest lender SBI.

Earlier, the State Bank of India has marginally increased the its base rate to 8.70 per cent, up 5 basis points, from 8.65 per cent.

This is the first rate hike in five years from the SBI.

SBI has also increased its benchmark prime lending rate (BPLR) by 5 bps to 13.45% from 13.40%. The last rate increase in both base rate and BPLR happened in 2013.

SBI attributes the base rate hike to the increase in term deposit rates. “The marginal increase in base rate is due to the upward movement in term deposit rates. As the cost of deposits goes up, it reflects on the base rate as well,” said PK Gupta, managing director, SBI.

Earlier last month, SBI announced a substantial reduction of charges for non-maintenance of Average Monthly Balance (AMB) in savings accounts, effective April 1.

The charges for non-maintenance of AMB for customers in metro and urban centers have been reduced from a maximum of Rs. 50 to Rs.15 per month, excluding Goods and Services Tax (GST). Similarly, for semi-urban and rural centers, the charges have been reduced from Rs. 40 to Rs. 12 and Rs. 10 per month respectively, excluding GST.

"We have reduced these charges taking into account the feedbacks and sentiments of our customers. Bank has always focused on keeping the interests of its customers first and this is one of our many efforts towards fulfilling customer expectations. Bank also offers its customers to shift from regular savings bank account to BSBD account on which no charges are levied," said P K Gupta, MD Retail and Digital Banking, SBI.