Corporation Bank today announced raising its base rate, the minimum rate below which a bank cannot offer loans, by 50 basis points to 8.25 per cent with effect from November 8.
The bank has revised the base rate for lending from 7.75 per cent to 8.25 per cent with effect from November 8, Corporation Bank said in a filing to the Bombay Stock Exchange.
This is the first review of the rates since it was introduced in July this year. As per the Reserve Bank of India (RBI) guidelines, banks have to review their base rates every quarter.
With the increase in base rate, all kinds of loans including housing, auto and education loans will become dearer by at least 50 basis points.
In order to bring in more transparency, the base rate was introduced as replacement for the benchmark prime lending rate (BPLR) from July 1 this year.
The RBI on Tuesday hiked the key short-term lending and borrowing rates by 25 basis points (0.25 per cent) each with immediate effect to combat high inflation.
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The short-term lending (repo) rate was increased to 6.25 per cent and the borrowing (reverse repo) rate to 5.25 per cent.
Following the RBI action, IDBI Bank increased deposit and lending rates by up to 50 basis points.
Yesterday State Bank of Mysore announced raising its base rate by 25 basis points to eight per cent.