India's largest public sector bank State Bank of India (SBI) has raised interest rates on fresh medium and long-term deposits by 25-50 basis points effective June 1, 2008.

The deposits for duration two years to less than three years will now earn an interest of 8.75 per cent, the same as deposits of one year to less than two years.

Also, interest rates on deposits of three years to less than five years have been increased to 8.85 per cent from 8.5 per cent.
Interest rates on deposits of five years and up to 10 years will be 9 per cent as against 8.5 per cent at present.

State Bank, which controls 23% of Country’s banking business along with its associates, has estimated a 25% growth in loans in the year to March 2009, compared with an earlier 20% forecast for the banking sector by the central bank.

SBI has reported a 48% growth in net profit to Rs 6,729 crore for the year to March 31, 2008 against Rs 4,541.31 crore for the year ended in March 2007.