Mumbai: The South-based private lender Dhanlaxmi Bank on Monday became the first lender to hike its lending rate following the rate tightening by the Reserve Bank of India last Friday.
The bank hiked its base rate or the minimum rate of lending by 25 basis points to 11%, while loans under the older benchmark prime lending rate will be dearer by 50 basis points at 20.75%.
“The hike in our base rate and BPLR follows the recent interest rate hike by RBI and reflects the tight monetary conditions,” chief financial officer Bipin Kalra said in a statement issued here.
Other banks such as the largest lender State Bank of India and its public sector peers Bank of Maharashtra and Indian Overseas Bank have said that they would be passing on the latest hike in rates to borrowers in some time.
In its mid-quarter review of the monetary policy, the RBI had on Friday last hiked its short-term lending rate by 25 basis points to 8.25 percent in its bid to bring down the headline inflation number that stood at an uncomfortable 9.78% for August.
With an eye on inflation, the central bank has hiked rates 12 times in the last 18 months and also articulated that it is ready to compromise on growth prospects in the short term to achieve its objective.