SBI also hiked its deposit rates by 0.25-0.75 per cent on various maturities effect from Saturday, a senior SBI official said.

"Even after this hike, SBI's BPLR (13.75 per cent) is amongst the lowest in the industry. We expect that this would attract more customers to the bank. The bank is still confident of maintaining a 20-22 per cent growth in advances and around 25 per cent growth in deposits for the remaining part of the fiscal," the official said.

The hike in BPLR will not affect existing and new housing loans upto Rs 30-lakh, besides, existing auto loans and all types of education loans, the official said.

However, new auto loan borrowers will have to pay more following the hike, he said.

SBI announced its hike after many banks, including its nearest competitor, ICICI Bank, increased their BPLRs to prevent a drastic fall in their margins after the apex bank hiked the cash reserve ratio and short-term repo rate by 0.25 per cent and 0.5 per cent respectively to check inflation.