Country's two leading private sector lenders ICICI Bank and HDFC Bank today increased their lending rates by up to 50 basis points (bps), making home, auto and commercial loans dearer.
ICICI Bank also increased deposit rates by up to 50 bps across various maturities.
In a release, ICICI Bank said it has hiked base rate, the minimum lending rate, by 50 bps or 0.5% to 8.25%, effective from tomorrow. For existing customers, it increased the benchmark prime lending rate by a similar percentage.
HDFC Bank raised base rate by 45 basis points to 8.20%, effective tomorrow, sources said.
While higher deposit rates would provide better returns to savers, rise in lending rates would increase the EMIs for auto and home loan borrowers. Besides, corporate loans too will also become expensive.
ICICI Bank said the existing fixed rate customers will not be impacted by the increase and their contracted rates will remain unchanged.
The rate hike by the two follows a similar move by others, including the largest bank SBI, following tightening of monetary policy by the Reserve Bank of India (RBI).
SBI had revised its base rate by 25 bps to 8.25% and BPLR by an equal quantum to 13%. Besides, the bank had also increased fixed deposit rates on two select maturities by 25 bps.
So far, over a dozen banks, including Punjab National Bank, Bank of Baroda, Union Bank and Indian Overseas Bank had revised interest rates since the third quarterly review of the monetary policy by the RBI.
To combat rising inflation, RBI has raised short-term lending and borrowing rates (repo and reverse repo) seven successive times since April, 2010 to 6.5% and 5.5%, respectively.
