| ICICI Bank benchmark advance rate (I-BAR) has been increased by 25 basis points to 11.25 per cent with effect from January 3, the bank said. One basis point is one hundredth of a percentage point. |
| Public sector banks may not follow the ICICI way immediately even though they have already raised their effective lending rates without a hike in their benchmark prime lending rates (BPLR). |
| The 25 basis points increase in I-BAR entails an identical rise in interest cost for existing borrowers as all loans to medium and large sized companies are linked to I-BAR. However, this will not have any impact on retail loans, including home loans. |
| Commercial banks had thus far resorted to charging higher interest rates on fresh borrowings only by tinkering with the spread on BPLRs, as tight liquidity conditions put pressure on lending rates. |
| Corporate loan rates have shot up by as much as 200 basis points in the last one month. Banking sources said banks were now lending at BPLR minus 200 basis points against BPLR minus 400 basis points till November 2005. |
| The BPLRs of major public sector banks range from 10.25 per cent to 10.75 per cent. HDFC Bank's BPLR is currently 11 per cent, which was last revised on January 2004. |
| ICICI Bank had earlier raised its I-BAR by 50 basis points to 11 per cent on February 9, 2005 and by an identical percentage point on November 17, 2004. |
| Most banks have hiked their deposit rates and the State Bank of India was a late follower last week-end. The country's largest bank hiked interest rates by 50 basis points on deposits of all maturity brackets, except for 46 to 179 days period. |
| ICICI Bank is yet to join these banks in the deposit rate hike race. The bank is also yet to decide on an increase in its BPLR for housing loans. |
| ICICI Bank's net interest margin in the second quarter ended September 30, 2005 was 2.40 per cent. |
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