HSBC India raises base rate to 9%

HSBC India raises base rate to 9%

Mumbai: Banking major HSBC India on Monday said it has hiked its base rate to 9% per annum from 8.5% per annum with effect from 12 May.

The bank has also raised its retail lending rate by 0.50% to 16.25% per annum from 15.75% per annum with effect from the same date.

The revision in the benchmark rates will be applicable to all existing and new variable rate mortgage loans linked to the base rate, the foreign lender said in a release here.

This announcement follows the 0.50% increase in repo and reverse repo rates announced by the Reserve Bank of India on 3 May.

HSBC India has also increased its savings bank account interest rate by 0.50%, from 3.5% per annum to 4% with effect from 3 May, the release said.

The base rate acts as a minimum interest rate of a bank, below which it cannot lend except DRI advances, loans to their own employees and loans to bank depositors against their own deposits, and includes those components of lending rates that are common across all categories of borrowers.

The Reserve Bank had upped its repo and reverse repo rates by 0.50% to combat the persistently high inflation. The repo and reverse repo rates now stand at 7.25% and 6.25%, respectively.

Following the RBI move, a clutch of public and private sector lenders had hiked their base rates in the last few days.