HDFC Bank's deposit rates may go up by 100 bps

New Delhi: The country's second largest private sector lender, HDFC Bank, has decided to hike fixed deposit rates by up to 100 basis points and lending rates by 50 basis points in line with industry trend.

Deposit rates across select maturities will be revised upward from 25-100 basis points effective tomorrow, sources said.

Similarly, base rate or the minimum lending rate would go up by 50 basis points to 8.7 per cent. This is the second hike in less than 20 days.

The Mumbai-based bank last raised its base rate by 45 basis point to 8.2 per cent on February 24.

With the hike in base rate, all kinds of loans, including auto loan for new borrowers, will become expensive by at least 50 basis points.

Fixed deposits below Rs. 15 lakh with maturity between 46-90 days will earn 5 per cent interest rate, up by 100 basis points, highest increase among all the maturity slabs.

Interest rate for term deposits between 61-90 days will go up by 50 basis points to 5.5 per cent from the prevailing 5 per cent interest rate, while maturity slab of 6 months 1 days to 6 months 15 days will give 6.75 per cent, 75 basis points higher than the existing rate.

At the same time, the interest rate of fixed deposits with the tenor of 366-380 days has been increased by 25 basis points to 8.25 per cent while 2 years 17 days to 3 years term deposit to earn 8.5 per cent, an increase of 0.25 per cent.

Most of the increase is in the short term duration slabs of up to 2 years much in line with other lenders.

The bank last revised fixed deposit rates on January 4, before the third quarter review of credit policy in the last week of January.

Banks have been raising interest rates following a 25 basis point hike in short-term lending (repo) and borrowing (reverse repo) rates announced by the Reserve Bank in its third quarterly review of monetary policy on January 25.

Meanwhile, HDFC Bank has also decided to increase its Benchmark Prime Lending Rate (BPLR) by 75 basis points to 17.25 per cent effective March 14.

This will make all kind of existing floating loans expensive by atleast 75 basis points resulting in higher installment amount.

Last month, country's largest lender SBI raised lending and deposit rates on select maturities by 25 basis points in response to policy rate hike announced by the Reserve Bank in January.

Besides, SBI revised the base rate by 25 basis points to 8.25 per cent.

Source: Financial Express