New Delhi: Home, personal and retail loans of Punjab National Bank (PNB) could cost more from this month, with the country’s second-largest public-sector lender deciding to hike its benchmark prime lending rate (BPLR) by 75 basis points to 13%.
“The bank has announced the increase in its BPLR by issuing a circular as the board meeting has not taken place,” PNB chief general manager U.S. Bhargava said.
“We would take a decision on increasing the home loan rates at the forthcoming board meeting,” he added.
The revised rates will come into effect from 16 April.
Earlier, State Bank of India and Bank of Baroda had increased their prime-lending rates to 12.75% and 13.25%, respectively. In the private sector, HDFC Bank increased BPLR to 15%, while ICICI Bank raised the benchmark advance rate to 15.75%.
The recent increase in lending rates followed the Reserve Bank of India’s (RBI) decision to increase short-term lending rate (repo) by a quarter percentage point to 7.75% and cash reserve ratio (the deposits to be kept by all banks with the central bank) by half a percentage point to 6.5%, to check high credit growth and tame inflation.
Earlier, expressing concern over the enlarging asset-liability mismatch, PNB had indicated that it may increase rates on all types of personal loans including housing finance to limit its exposure to this segment.
Dates for the board meeting and the meeting of the Asset-Liability Committee (Alco) are expected to be finalised this week.
PNB has said it will continue to promote loans for productive activities like entrepreneurship and small businesses as they have a positive impact on the nation’s gross domestic product.