HDFC Bank to raise rates from tomorrow

New Delhi: India's second largest private lender HDFC Bank has decided to raise its lending rates by 50 basis points in line with its peers making its home, auto and corporate loans more expensive.

The base rate, or the minimum lending rate, of HDFC Bank will become 10 per cent from the existing 9.50 per cent, sources said.

At the same time, the benchmark prime lending rate (BPLR) of the bank is expected to be increased by similar percentage points to 18.50 per cent.

The bank has also decided to raise fixed deposits rates by up to 75 basis points on the select maturities effective tomorrow, sources said.

HDFC Bank's fixed deposit rate in the 1 year 1 day to 1 year 15 days basket is likely to be 9 per cent per annum as against existing 8.25 per cent, an increase of 75 basis points.

Besides, interest rate for term deposits between 46-60 days will go up by 25 basis points to 7 per cent from the prevailing 6.75 per cent.

However, interest rates on other fixed deposits have been left unchanged.

Yesterday, country's top two lenders SBI and ICICI Bank announced hike in lending rates by 50 basis points each in response to tight monetary policy of the central bank.

Both SBI and ICICI have increased the base rate, or the minimum lending rate, to 10 per cent from the existing 9.50 per cent.

Following the Reserve Bank's decision to raise short-term key rates in its first quarter review of monetary policy last month, lenders have responded by increasing interest rates.

Major lenders, including Punjab National Bank, Bank of Baroda, Oriental Bank of Commerce, have raised interest rates. Almost all major banks have hiked their interest rates in the range of 25-100 basis points.

The RBI had hiked its key short-term lending rates by a higher-than-expected 50 basis points on July 26 to tame the uncomfortably high inflation number, which stood at 9.44 per cent in June.

This was the 11th hike by the central bank since March 2010, when it switched over from the monetary policy loosening stance adopted during the financial slowdown to one for curbing inflation.

Source: Financial Express