Indian Bank on Thursday raised its lending rates by 50 basis points, within days of the Reserve Bank announcing an increase in its short—term lending and bank savings rates.
The sixth bank to announce the rate hike after RBI’s move, the PSU lender has upped its Base Rate from 9.50 per cent to 10 per cent per annum, while increasing its Benchmark Prime Lending Rate (BPLR) to 14.25 per cent from 13.75 per cent earlier.
The new rates would be effective from May 5, 2011, Indian Bank said in a filing to the Bombay Stock Exchange.
Already, five leading banks, including PNB, OBC and YES Bank, have increased their interest rates by half a percentage point with effect from today, making all loans costlier.
The announcements to hike rates came within a day of the Reserve Bank hiking its lending and borrowing rates by 50 basis points each.
Punjab National Bank (PNB), Oriental Bank of Commerce (OBC), Bank of Maharashtra (BoM), IDBI Bank and YES Bank have also hiked their lending rates by 50 basis points.
The higher lending rates would make loans dearer for both new and existing auto, home and corporate borrowers.
The RBI on Tuesday hiked the repo and reverse repo rate to 7.25 per cent and 6.25 per cent respectively, besides, raising the savings bank deposit interest rate to 4 per cent, from 3.5 per cent. Bank savings deposit rate is currently regulated by the Reserve Bank.