3 banks hike lending, deposit rates by up to 0.75%

PTI

New Delhi, 11 December 2010: Domestic lenders Punjab National Bank, Bank of Baroda and HDFC Bank Friday hiked their lending and deposit rates by up to 75 basis points.

PNB has decided to revise the base rate by 50 basis points from 8.5 percent to 9 percent with effect from December 13, the state-run lender said in a statement.

The base rate is the lowest rate below which banks cannot offer loans. In order to bring in more transparency, the base rate was introduced as a replacement for the Benchmark Prime Lending Rate (BPLR) from July 1, 2010.

With the increase in base rate, all kinds of loans taken from PNB, including corporate, housing and auto loans, would be dearer by at least 50 basis points (0.5 percent) for new borrowers.
Meanwhile, HDFC Bank hiked both deposit and lending rates by up to 75 basis points.

The bank revised the rate of interest on domestic term deposits of various tenor upward by 25-75 basis points to tide over the tight liquidity situation in the market.

HDFC Bank also hiked its Benchmark Prime Lending Rate (BPLR) by 25 basis points to 16.5 percent per annum from 16.25 percent with effect from today.

In addition, Bank of Baroda (BoB) raised fixed deposit rates by 25 basis points across various maturities.

Term deposits (up to Rs 1 crore) with a maturity of 181-270 days will now fetch BoB customers 6.25 percent interest, as compared to 6 percent at present.

At the same time, the interest rate on fixed deposits with 271 days to one year tenor has also been increased by 25 basis points to 7 percent from the existing 6.75 percent, BoB said.

Meanwhile, another state-run lender, Development Credit Bank (DCB), today also increased its BPLR by 25 basis points to 15.75 percent, making loans costlier for existing customers.

Earlier this week, the country’s biggest lender, SBI, raised interest rates by up to 150 basis points, or 1.5 percent, across fixed deposits of various maturities, while Punjab National Bank hiked deposit and lending rates by up to 100 basis points.

SBI now offers a maximum interest rate of 8.75 percent on deposits with a maturity period of 8-10 years, an increase of 100 basis points vis-a-vis the old rate. The highest rate hike of 150 basis points will be for term deposits with a tenor of 46-90 days.