Why the bank lending rates change often?

For example on 2003 X Bank has charged 8% for SHG loans and now it charges 12.50% rate of interest for the same loan. Bank lending rates changes quiet frequently. What prompts the banks to change their rate of interest for loans?

Following are the factors that affect the Lending interest rate of the banks.

a.) Benchmark Prime Lending Rate (BPLR)
b.) Cash Reserve Ratio (CRR)
c.) Repo Rate
d.) Reverse Repo Rate
e.) Statutory Liquidity Ratio (SLR)

a.)Benchmark Prime Lending Rate:
Prime Lending Rate (PLR) can be defined as the rate of interest at which banks can lend to
their credit worthy customers. However in Indian context the definition differs infact it is
treated as a benchmark rate for most retail and term loans. The Reserve Bank of India (RBI)
does not set these rates, but in a broad way stipulates the interest rates in the economy.

Each and every bank has its own BPLR however it would be in line with the PLR of Reserve bank of India (RBI). Benchmark prime lending rate of all banks is influenced by RBI’s PLR, CRR, SLR, REPO Rate and Reverse Repo Rate. Hike in lending rate always have negative impact in the nations economy.
To summarize the whole thing this is the benchmark interest rate on the basis of which financial institutions decide the interest rates on various loan products