BoB hikes lending rate by 50 bps to 12.5%

Public sector lender Bank of Baroda today hiked its benchmark prime lending rate (PLR) by 50 basis points to 12.50 per cent.

The hike takes the bank's PLR from the existing 12 per cent to 12.50 per cent, the bank informed the Bombay Stock Exchange (BSE).

The hike is with effect from today, the bank said.

Earlier in the week, another lender, IDBI Bank, had hiked its PLR by 0.50 per cent to 13.25 per cent.

A clutch of banks have also upped their deposit rates in recent days while the country's largest lender State Bank of India's Chairman O P Bhatt has said that there is an upward bias in deposit rates.

Kotak Mahindra Bank, ICICI Bank, Union Bank of India and Punjab National Bank are amongst the banks that have raised their deposit rates.

The increase in PLR and deposit rates was widely expected after the Reserve Bank of India increased its key short-term rates--repo and reverse repo--on July 27 with a view to combat the prevailing high inflation.

The repo rate was hiked by 0.25 per cent to 5.75 per cent while the reverse repo rate has been upped by 0.50 per cent to 4.5 per cent, sparking-off the present round of hikes by banks.