 "HDFC, ICICI Bank raise rates by 25 bps each")
Your borrowing cost is set to rise, as the country's largest banks have started increasing their lending rates.
India’s largest mortgage lender, Housing Development Finance Corporation (HDFC) and the largest private sector lender, ICICI Bank on Thursday announced an increase in their lending rates.
HDFC has decided to raise its retail prime lending rate, on which its adjustable rate home loans are benchmarked, by 25 basis points to 16.65 per cent from Friday. Following the rate revision, it would offer housing loans up to Rs 30 lakh at 10.40 per cent and loans above Rs 30 lakh at 10.65 per cent.
ICICI Bank has also announced a 25 basis points raise in its base rate or minimum lending rate from Friday. The private lender’s base rate would be increased to 10 per cent. The rate revision would make all loans and advances offered by the bank on floating interest rates from July 2010 expensive. The bank had decided to determine the interest rates on new loans and advances, including consumer loans, with reference to its base rate with effect from July 1, 2010.
“ICICI Bank has also announced an increase of 0.25 per cent in its benchmark prime lending rate and in its floating reference rate for consumer loans (including home loans) with effect from August 23. The above benchmark rates are used for determining interest rates on loans and advances sanctioned up to June 30, 2010,” the bank said in a statement on Thursday.
The private lenders had also raised their deposit rates before the lending rate hikes. ICICI Bank had increased its deposit rates by 50-75 basis points, while HDFC Bank had revised it upwards by 100 basis points. Axis Bank and YES Bank had hiked deposit rates by 25-225 basis points.
So far, most government-owned banks, including the country’s largest lender, State Bank of India, have not revised their lending rates.
While RBI had kept the policy rate unchanged in its first quarter monetary policy review, its liquidity tightening measures in the past few weeks have impacted short-term rates.
On July 15, the central bank capped banks’ borrowings under the liquidity adjustment facility and increased the marginal standing facility rate by 200 basis points to 10.25 per cent. The measures led to tightness in liquidity. Bankers had predicted if the steps were not rolled back soon, short-term deposit rates would rise, followed by an increase in lending rates.
India’s largest mortgage lender, Housing Development Finance Corporation (HDFC) and the largest private sector lender, ICICI Bank on Thursday announced an increase in their lending rates.
HDFC has decided to raise its retail prime lending rate, on which its adjustable rate home loans are benchmarked, by 25 basis points to 16.65 per cent from Friday. Following the rate revision, it would offer housing loans up to Rs 30 lakh at 10.40 per cent and loans above Rs 30 lakh at 10.65 per cent.
ICICI Bank has also announced a 25 basis points raise in its base rate or minimum lending rate from Friday. The private lender’s base rate would be increased to 10 per cent. The rate revision would make all loans and advances offered by the bank on floating interest rates from July 2010 expensive. The bank had decided to determine the interest rates on new loans and advances, including consumer loans, with reference to its base rate with effect from July 1, 2010.
“ICICI Bank has also announced an increase of 0.25 per cent in its benchmark prime lending rate and in its floating reference rate for consumer loans (including home loans) with effect from August 23. The above benchmark rates are used for determining interest rates on loans and advances sanctioned up to June 30, 2010,” the bank said in a statement on Thursday.
The private lenders had also raised their deposit rates before the lending rate hikes. ICICI Bank had increased its deposit rates by 50-75 basis points, while HDFC Bank had revised it upwards by 100 basis points. Axis Bank and YES Bank had hiked deposit rates by 25-225 basis points.
So far, most government-owned banks, including the country’s largest lender, State Bank of India, have not revised their lending rates.
While RBI had kept the policy rate unchanged in its first quarter monetary policy review, its liquidity tightening measures in the past few weeks have impacted short-term rates.
On July 15, the central bank capped banks’ borrowings under the liquidity adjustment facility and increased the marginal standing facility rate by 200 basis points to 10.25 per cent. The measures led to tightness in liquidity. Bankers had predicted if the steps were not rolled back soon, short-term deposit rates would rise, followed by an increase in lending rates.