Mumbai: In line with the market trend, IDBI Bank on Monday announced a hike in deposit and lending rates by up to 100 basis points.
While the interest rates on fixed deposits of different maturities will be increased by 25 to 100 basis points, loans from the bank would also become expensive, with the lender raising its base lending rate by 50 basis points to 9%, a release said.
In addition, the bank has hiked its benchmark prime lending rate (BPLR) by 25 basis points to 13.75%, which will also make existing loans more expensive.
While the new deposit rates will come into effect from 15 December, the revised lending rates will be applicable to existing and new borrowers from 1 January.
As regards the deposit rates, IDBI Bank will offer the highest rate of 8.75% on deposits of 1,100 days’ tenor, compared to 8.25% interest at present.
The highest increase of 100 basis points was announced for short-term deposits with a 46-90 day maturity period. The depositors will now earn 5.50% interest on these short-term deposits, up from 4.50% at present.
Following a recent suggestion from Reserve Bank governor D. Subbarao to hike deposit rates to increase the level of national savings, several banks -- including market leaders State Bank of India, ICICI Bank, Punjab National Bank and Bank of India -- have raised their rates by up to 150 basis points.