ICICI Bank hikes lending rates by 50 bps

Mumbai, June 9 (UNI) ICICI Bank today increased lending rates by 50 basis points, in the wake of hike in the repo/reverse repo rates by 25 basis points by the Reserve Bank of India, last evening.

The hike in the interest rate was for the second time by ICICI Bank in just over a month came amid high demand for loans from companies and consumers in the fast-growing economy, the bank maintained.

The latest rate hike effectively meant that ICICI Bank's floating home loans will cost 9.5 per cent and fixed rates 10.75 per cent, while deposit rates remain unchanged. ''We expected the rates to soften after March as usual, but that did not happen, so we have to raised it,'' bank's Deputy Managing Director Chanda Kochhar said.

Further, she pointed out that the yesterday's rate hike by RBI was a clear pointer that rates are unlikely to soften. It (bank) last raised lending rates on May 5, when it boosted home loan rates by 50 basis points. The latest rise applies to both corporate and retail borrowers.

Its consumer lending has been growing at an annual rate of 50 to 60 percent. The bank's margin between deposit and lending rates has been squeezed in recent months due to strong competition for funds.

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