4 PSU banks increase interest rates by up to 50 bps
As plenty of as state-owned banks including Oriental Bank of Commerce (OBC) and Indian Bank hiked rates of interest by up to 50 basis points.
While Indian Bank and Allahabad Bank raised base rate, or maximum lending rate by 25 basis points, OBC and IDBI Bank raised deposit rates by up to 50 basis points across select maturities.
Chennai-based Indian Bank increased base rate to 10.25 % from earlier level of 10 % effective today.
With the hike, new housing, auto and other loans will become expensive by atleast 25 basis points.
Besides, the bank has raised its Benchmark Prime Lending Rate (BPLR) by 25 basis points as well to 14.50 %, Indian Bank said in a statement.
The rate of interest on term deposits from 3-5 years of OBC has been revised to 9.25 % from 9 % while 5-10 years fixed deposit interest rates has been raised by 50 basis points to 9.25 %.
Even IDBI Bank hiked deposit rates by up to 50 basis points. Fixed deposit rate for maturity in between 46-90 days has been raised by 50 basis points to 7 % while deposits for 7-10 years will earn 25 basis point higher interest at 9.25 %.
Kolkata-based Allahabad Bank also raised base rate by 25 basis points to 10.25 % and BPLR from existing 14.25 % to 14.5 % effective from July 15. Increase in BPLR would make existing loans costlier.
The RBI had on June 16 hiked its key short-term lending and borrowing rates by 25 basis points (0.25 %) each with immediate effect to tackle inflation. The short-term lending (repo) rate now stands at 7.5 % and the borrowing (reverse repo) rate at 6.5 %.
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Rate hikes by banks comes in response to rate of interest increase by the Reserve Bank last month in its mid-quarterly review of credit owner 2011-12.
Source: [ET]
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