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| HDFC Bank raises BPLR by 50 bps to 16.25% |
| BS Reporter / Mumbai Sep 07, 2010, 00:19 IST |
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HDFC Bank, India’s second-largest private sector bank, on Monday raised its benchmark prime lending rate (BPLR) by 50 basis points to 16.25 per cent.
It is one the last banks to raise its lending rate as the cost of funds rises across the banking system after the Reserve Bank of India (RBI) raised key rates in the July 27 monetary policy.
There was scope for another 50 basis points rise in deposit and lending rates, a senior HDFC Bank official said in Mumbai. The bank had raised rates between 25 and 75 basis points on its term deposits after the RBI review. Many banks had raised interest rates on term deposits by 25-100 basis points in the last 45 days, the official said, explaining the reason for the rise in the cost of funds.
State Bank of India (SBI) and ICICI Bank, the nation’s biggest banks, announced an increase in BPLRs by 50 basis points in mid-August, making existing retail — home and auto — and other commercial loans expensive.
SBI raised its BPLR to 12.25 per cent. ICICI Bank revised its BPLR to 16.25 per cent from 15.75 per cent. It also increased its floating reference rate for consumer loans, including home and auto loans, by 50 basis points to 13.25 per cent.
While SBI raised deposit rates across maturities by as much as 150 basis points for short-term deposits, ICICI Bank rasied deposit rates across various maturities by up to 75 basis points. One per cent is 100 basis points.
RBI’s decision to increase key policy rates in the first quarter review on July 27 and tight liquidity conditions have pushed the cost of funds, say bankers.
BPLR pertains to rates on loans before the new base rate system came into effect from July 1.
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