4 PSU banks raise interest rates up by 50 bps

New Delhi: As many as three state-owned banks including Oriental Bank of Commerce (OBC) and Indian Bank hiked interest rates by up to 50 basis points While Indian Bank and Allahabad Bank raised base rate, or minimum lending rate by 25 basis points, OBC and IDBI Bank raised deposit rates by up to 50 basis points across select maturities.

Chennai-based Indian Bank increased base rate to 10.25 per cent from earlier level of 10 per cent.

With the hike, new housing, auto and other loans will become expensive by atleast 25 basis points.Besides, the bank has raised its Benchmark Prime Lending Rate (BPLR) by 25 basis points as well to 14.50 per cent,

Indian Bank said in a statement.

The rate of interest on term deposits from 3-5 years of OBC has been revised to 9.25 per cent from 9 per cent while 5-10 years fixed deposits rate has been raised by 50 basis points to 9.25 per cent.

Even IDBI Bank hiked deposit rates by up to 50 basis points. Fixed deposit rate for maturity in between 46-90 days has been raised by 50 basis points to 7 per cent while deposits for 7-10 years will earn 25 basis point higher interest at 9.25 per cent.

Kolkata-based Allahabad Bank also raised base rate by 25 basis points to 10.25 per cent and BPLR from existing 14.25 per cent to 14.5 per cent effective from July 15. Increase in BPLR would make existing loans costlier.

Rate hikes by banks comes in response to interest rate increase by the Reserve Bank last month in its mid-quarterly review of credit policy 2011-12.

The RBI had on June 16 hiked its key short-term lending and borrowing rates by 25 basis points (0.25 per cent) each with immediate effect to tackle inflation. The short-term lending (repo) rate now stands at 7.5 per cent and the borrowing (reverse repo) rate at 6.5 per cent.

Source: Financial Express