Simultaneously, the bank also raised the fixed deposit rates by 25 basis points for tenure ranging between 1 year and 18 months to 9.75 per cent.
On June 16, a handful of private banks, including Yes Bank had increased the PLR by 50 basis points to 16 per cent, following the central bank's move a week earlier to hike the repo rate by 25 basis points to 8 per cent in its effort to contain inflation.
HDFC Bank which had earlier increased rates also announced a fresh increase. PLR indicates the interest rate at which a commercial bank lends money to its most credit-worthy customers such as large corporations or institutions.Repo rate is the interest at which the Reserve Bank of India (RBI) lends money to the banks.
With the recent hike in repo by RBI, the banks have been compelled to increase their lending rates in order to protect their interest margins on loans. As the inflation numbers continue to hover around double digit, fuelled by rocketing oil prices, market watchers fear another round of hike in key interest rates by the RBI in its forthcoming policy on July 29.
