SBI on Friday said lending and deposit rates will go up in view of the festive season demand.

“Now the busy season has started so there is a huge credit demand and banks are scrambling for deposits. Deposit rate, I think, will go up and accordingly to that lending rates can also go up,” SBI Chairman Pratip Chaudhuri said.

Banks would first raise the deposit rates and then they will calibrate the lending rate, he added.

SBI also increased the spreads on auto and home loans by as much as 0.20 per cent, which will affect new borrowers.

Noting that the base rate or the minimum lending rate is not a function of policy rate, Mr. Chaudhuri said it is a function of bank’s liquidity position and ability to meet the deposit and lending situation.

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