The increase has been enough to radically change the central bank's credit rating, according to local daily Estadão.
Among Brazil's five largest banks - Caixa, Banco do Brasil, Itaú Unibanco, Bradesco and Santander - Banco do Brasil has the highest interest rate on vehicle financing and Caixa has the second highest revolving rate for credit cards.
At the end of 2015, Banco do Brasil had an average interest on credit for vehicles at 26.5% per year, the lowest among the five major banks. With the current crisis in the automotive sector, demand plummeted and competitors reacted by reducing rates.
Santander dropped its rate by almost five points and it currently stands at 24%, the most competitive rate in the group. Bradesco and Itaú and reduced their rates by one and two points, respectively, in the same period, while Banco do Brasil upped its rate slightly to 27.2%.
At the end of 2015, Caixa clients who did not pay off their credit cards in full had to pay 350.4% per year in revolving interest. At the time, it was the lowest rate among the five big banks. Since then, that figure has risen regularly, to 412% in March, 433% in May, 459% in August and 508% on September 15. The public bank's rate is now second only to Santander, at some 581% per year.
In 2008, state-run banks became central to the plans of former presidents Luiz Inácio Lula da Silva and Dilma Rousseff to encourage consumption and keep Brazil from falling victim to the financial crisis by lowering interest rates.
That plan, however, has since changed. Both public banks began to gradually increase their rates last year in response to increases in the country's key rate, known as the Selic, and due to a need to improve capital structure.
When President Michel Temer named Paulo Caffarelli as president of Banco do Brasil and Gilberto Occhi as head of Caixa in May, the push to improve the financial situation of the two state-run banks started gaining speed. The two officials changed their banks' discourse and started focusing more on restoring revenues and profitability.