Mumbai, Dec. 26: The State Bank of India (SBI) today raised its benchmark prime lending rate (PLR) by half a percentage point to 11.5 per cent. It is the fifth bank in 15 days to make loans dearer. The change will be effective from Wednesday.

The hike in SBI’s benchmark lending rate will affect a host of borrowers. Bankers said not only will loans to companies turn dearer, but interest rates for existing floating rate home loan borrowers could also go up.

The State Bank was, however, silent on whether home loan rates will go up because of this move.

It is likely that other nationalised banks, which had refrained from rate hikes, will now announce half-a-percentage-point rise in their benchmark lending rates in the next few days.

The Delhi-based Oriental Bank of Commerce (OBC) increased its PLR by quarter of a percentage point last Saturday.

SBI’s revised PLR at 11.5 per cent is still lower than the 13.75 per cent of ICICI Bank and 13 per cent of HDFC Bank. SBI’s move follows the hike in the cash reserve ratio (CRR) by 50 basis points to 5.50 per cent on December 8 by the Reserve Bank of India (RBI). CRR is the portion of a bank’s deposits that has to be maintained with the central bank.

The RBI move, which was aimed at controlling inflation, resulted in ICICI Bank, HDFC Bank and Centurion Bank of Punjab raising both their lending and deposit rates.

Many banks have raised both lending and deposit rates four times this year following the central bank’s tight-money policy.

Hours before the RBI announced the 50-basis-point CRR hike, the SBI had raised interest rates on domestic term deposits by 25-75 basis points. The increase was more in deposits with long maturity tenures.

The interest rate on deposits of one year to less than three years was increased to 7.50 per cent (6.75 per cent), that between three years and less than five years to 7.75 per cent (7 per cent). Five-year and above deposits fetched an interest of 8 per cent (7.25 per cent).