State-run lender Bank Of India today raised its base rate by 75 basis points (bps) in the wake of rate tightening done by the Reserve Bank of India (RBI) on Tuesday.
The bank hiked its base rate or the minimum rate of lending by 75 bps to 10.75% with immediate effect, it said in a statement issued here.
The bank has also hiked rate on loans under the older BPLR system by a similar 75 bps to 15%.
The RBI had hiked the repo, its short-term lending rate, by a higher-than-expected 50 bps to 8%, which is bound to transmit into lending rate hikes by banks.
The bank during its June quarter results had said it would raise rates immediately.
The bank's Executive Director N Seshadri had said the bank was lagging by 25 bps in the base rate as it did not raise its rate the last time but said it was on par with other banks on the deposit rates and was not likely to hike it.
Following a hefty rate hike by the RBI, a few private sector banks such as Yes Bank, ING Vysya and DCB upped their lending rates by 50 bps each. More banks are expected to follow suit.
