State-owned Punjab & Sind Bank (PSB) today said it has raised lending rate by up to 55 basis points making retail products, including housing and auto loans, expensive.
In view of hardening interest rates, the bank revised its base rate or the minimum lending rate to 9 per cent from 8.45 per cent, an increase of 55 basis points, PSB said in a statement.
The base rate is the lowest rate below, which banks cannot offer loans. In order to bring in more transparency, the base rate was introduced as a replacement for the Benchmark Prime Lending Rate (BPLR) from July 1, 2010.
With the increase in base rate, all kinds of loans taken from PSB, including corporate, housing and auto loans, would be dearer by at least 55 basis points for new borrowers.
PSB also hiked its Benchmark Prime Lending Rate (BPLR) by 50 basis points to 14 per cent per annum making loans expensive for the existing borrower.
The new rates would be effective from December 20, it said.
At the same time, the bank increased fixed deposit rates by 15-75 basis points across various maturities.
PSB Executive Director P K Anand said, the bank has also announced special rates of 7.5 per cent, 8.75 per cent and 9 per cent for fixed maturities of 222 days, 500 days and 1,000 days respectively.
Meanwhile, private sector Karur Vysya Bank also raised both base rate and BPLR by 50 basis points. Base rate has been increased to 9.5 per cent from existing 9 per cent while BPLR will go up to 14.5 per cent from 14 per cent effective December 24.
Many banks including SBI, ICICI Bank, HDFC Bank and Bank of Baroda have already increased the interest rates in the past one month.
Earlier this month, SBI raised interest rates on fixed deposits by up to 150 basis points, or 1.5 per cent, across various maturities, while Punjab National Bank hiked deposit and lending rates by up to 100 basis points.
