Bank of India, Andhra Bank hike PLRs

Public sector banks, Bank of India (BoI) and Andhra Bank today raised their benchmark prime lending rates (PLRs) by 50 basis points. Mumbai-based BoI's new PLR will be 11.25 per cent and Hyderabad-based Andhra Bank's 11 per cent.

BOI has also effected a 50 basis points hike in its home loan rates across various maturity slabs. Under the floating rate scheme, the new interest rate would be 8 per cent for loans up to 5 years, 8.50 per cent for 5-10 years and 9 per cent for loans over 10 years. The revision in rates is effective from May 1, 2006.

Elaborating on the rationale for the hike in lending rates, BOI said the deposit interest rates were raised by 50-75 basis points from April 10, 2006 in tune with the market dynamics. With the overall increase in cost of funds, BoI felt the need to increase lending interest rates.

Andhra Bank would also revise (increase) its deposit rates to mobilise resources for funding credit growth. The competition for the resources is intense and hence, the bank would also tap bulk deposits from corpoartes, chairman and managing director K Ramakrishnan said.

Andhra Bank reported a flat growth in its net profit for fourth quarter ended March 2006 at Rs 138.59 crore against Rs 138.77 crore in corresponding period in 2004-05.