Mumbai: Joining the rate hike bandwagon, state-run lender Indian Bank Thursday raised its lending rates by 50 basis points, within days of the Reserve Bank announcing an increase in its short-term lending and bank savings rates.
The sixth bank to announce the rate hike after RBI’s move, the PSU lender has upped its Base Rate from 9.50% to 10% per annum, while increasing its Benchmark Prime Lending Rate (BPLR) to 14.25% from 13.75% earlier.
The new rates would be effective from 5 May, 2011, Indian Bank said in a filing to the Bombay Stock Exchange.
Already, five leading banks, including PNB, OBC and YES Bank, have increased their interest rates by half a percentage point with effect from today, making all loans costlier.
The announcements to hike rates came within a day of the Reserve Bank hiking its lending and borrowing rates by 50 basis points each.
Punjab National Bank (PNB), Oriental Bank of Commerce (OBC), Bank of Maharashtra (BoM), IDBI Bank and YES Bank have also hiked their lending rates by 50 basis points.
With the increase, the base rate or the minimum lending rate for PNB, OBC, IDBI and BoM will stand increased to 10%, while that of private sector lender YES Bank will be 9.50%.
Besides, the Benchmark Prime Lending Rate (BPLR) of PNB stands at 13.50%, OBC (14.25%), IDBI (14.50%), BoM (14.25%) and Yes Bank (19%).
The higher lending rates would make loans dearer for both new and existing auto, home and corporate borrowers.
Besides, state-run IDBI Bank would hike the retail term deposit rates by 25-50 basis points in different maturity buckets and private sector YES Bank has increased the Savings Account deposit rates by 50 basis points to 4% from today, thereby benefiting small savers.
The RBI on Tuesday hiked the repo and reverse repo rate to 7.25% and 6.25% respectively, besides, raising the savings bank deposit interest rate to 4%, from 3.5%. Bank savings deposit rate is currently regulated by the Reserve Bank.