HDFC bank retail loans goes expensive
HDFC Bank is the last bank to finally raise lending and fixed deposit. The central bank increased 50-basis points (100 basis points (bps) = 1%) increase in policy rates on 3rd May. This means that all retails loans (car loans, consumer and personal loans) and corporate loans have become expensive but the good news is that even the FD rates have gone up, so you earn more on your fixed deposits. ICICI Bank and SBI have also raised lending and borrowing rates.
The rates are effective from Thursday, 12th May by 55 bps to 9.25% per annum which is competitive with SBI and ICICI Bank. HDFC Bank also hiked its prime lending rate (PLR) by 50 bps to 17.75%. Bank’s FD rates are highest in the 46-90 days bracket where it will now offer 6.25% per annum, up 125 bps from 5% earlier. The bank has raised rates for nine different tenures of short terms, and has left rates for FDs of more than one year unchanged.
Since July 2010, when the base rates replaced the benchmark lending rate (BPLR) for the banking industry, SBI and HDFC Bank, have both raised their rates five times while ICICI Bank has done it only four times. From 7.25% on 1st July 2010, HDFC Bank’s base rate has increased by sum 200 bps to 9.25% now.
For retail customers, the current hike by HDFC Bank will make auto, consumer and personal loans expensive, but not home loans because all mortgage loans by the bank are sourced from its parent HDFC, which has not, raised its rate yet. But HDFC is expected to increase rates very soon.
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