IDBI Bank hikes lending, deposit rates by up to 50 basic points soon
State-owned IDBI Bank today raised lending and deposit rates by up to 50 basis points soon after the Reserve Bank’s monetary policy action, a move likely to be followed by other lenders in the coming days.
In response to increase in cost of funds and keeping in view the market conditions, the bank has decided to increase both base rate and Benchmark Prime Lending Rate (BPLR) by 50 basis points each, IDBI Bank said in a statement.
With the increase, base rate or the minimum lending rate will be 10% and BPLR would be 14.50%, it said.
Both new and existing housing, auto and other loans will become costlier by at least 50 basis points.
At the same time, depositors will earn higher interest for the fixed deposit.
The ALCO (asset liability Committee) of IDBI Bank reviewed the interest rates on retail term deposits and keeping in view the measures announced by RBI, inflation and liquidity scenario, the bank has decided to increase the retail term deposit rates by 25-50 basis points in different maturity buckets, it said.
The revised rates will be effective from May 5, it said.
Earlier in the day, the RBI hiked key short-term lending and borrowing rates by 50 basis points (0.5%) each with immediate effect to tackle inflation. The short-term lending (repo) rate now stands at 7.25% and the borrowing (reverse repo) rate at 6.25%.
Fixed deposit for 46-90 days of IDBI Bank will earn higher interest rate of 6.50% from the existing 6% while 91 days-6 months term deposit rates would go up by 25 basis points to 7.75.
At the same time 270 days-1 year fixed deposit rate will go up by 50 basis points to 8.50% and term deposit with 500 days maturity will earn 9.50%, up 25 basis points from existing rate.
Source: [Business Standard]
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