New Delhi, Feb 1 (PTI) Seven lenders, including Bank ofBaroda (BoB) and HDFC, today raised interest rates by up to 50basis points, in response to the Reserve Bank''s tight monetarypolicy announced last week.
While BoB and Oriental Bank of Commerce (OBC) raised thedeposit rates, HDFC, Indian Bank, Indian Overseas Bank(IOB), Bank of India (BoI) and Dena Bank hiked their lendingrates.
BoB raised it deposit rates by 50 basis points (bps) to9.10 per cent for 444 days deposits till March 2011 and fordeposit of 1 year and up to 443 days to 8.75 per cent, witheffect from tomorrow.OBC has decided to raise the fixed deposit rates by 25basis points for deposits of varying maturities. It will paythe highest rate of 9.25 per cent for 500-day deposits.
Housing finance leader HDFC too raised its floatinginterest by 25 basis points with effect from today for bothexisting and new customers.
HDFC has increased its retail prime lending rate, onwhich its adjustable rate home loans is benchmarked by 25basis points.
"This is in line with the interest rates in the economy,which have hardened due to an increase in policy rates,inflation and liquidity in the domestic market," HDFC said.
Indian Bank has announced an increase in base lendingrates by 50 basis points to 9.5 per cent with effect fromtoday.
Besides, IOB has also raised its base rate from 9 percent to 9.5 per cent with effect from today.
BoI raised its base rate and BPLR by 50 bps each to 9.5per cent and 13.75 per cent, respectively with effect fromFebruary 3.
Dena Bank raised its minimum lending rate or (the BaseRate) by 0.50 per cent to 9.45 per cent with effect fromFebruary 2.
While the higher deposit rates would provide betterreturns to savers, rise in base rates would increase the EMIsfor auto and home loan borrowers. Besides, corporate loans toowould become expensive.
Banks have been raising interest rates following a 25basis point hike in short-term lending (repo) and borrowing(reverse repo) rates announced by the Reserve Bank in itsthird quarterly review of monetary policy last week.
The announcement of hiking deposit and lending ratesfollows similar announcements made by Punjab National Bank,Allahabad Bank and Punjab