Oct. 5: After deposit rates, it is now the turn of lending rates to go up. On Tuesday, a number of banks including ICICI Bank, HDFC Bank and Bank of Baroda revised their base rates upwards. HDFC Bank and ICICI have both raised their base rates by 0.25 percentage point.
In its statement, ICICI Bank has said that the hike would not affect its fixed rate loan customers though. Bank of Baroda has revised its base rate upwards by 0.5 percentage points. These increases should see a similar increase on most of the lending rates. The home loan interest rate of ICICI Bank will increase by a quarter per cent from Wednesday. Other banks that have revised base rates include Development Credit Bank and UCO Bank.
In a filing to the Bombay Stock Exchange, DCB’s managing director and CEO, Mr Murali M. Natrajan, said, “Deposit rates and consequently cost of funds have increased, especially in the shorter tenor, necessitating an increase in the base rate.” On September 30, a number of lenders including Punjab National Bank, Axis Bank and Kotak Mahindra Bank had also raised their base rates.
Base rate is the lowest rate that a bank is allowed to offer its customers. This increase comes about a month after the Reserve Bank of India revised upwards some key policy rates.