Dena Bank raises Base Rate by 0.50 pc to 9.45 pc

Mumbai, Feb 1 (PTI) Within a week of the Reserve Banktightening rates, public sector lender Dena Bank today raisedits minimum rate of lending or the Base Rate by 0.50 per centto 9.45 per cent.

"The bank has raised its Base Rate by 50 basis pointsfrom 8.95 per cent to 9.45 per cent with effect fromFebruary 2," a statement by the bank said.

The bank is the first one to hike its Base Rate sincethe RBI increased its key rates--the repo at which it lends tothe banks and the reverse repo at which it accepts excessmoney from banks--by 25 basis points each on January 25.

The RBI''s action was a result of taming the inflationnumber which stood at 8.43 per cent for December 2010. Amajority of banks, including SBI had increased their BaseRates in December.

The Base Rate system was introduced on July 1 lastyear to make lending more transparent. Bank do not lend belowthe Base Rate irrespective of the loan size and tenor.

Banks can raise their Base Rates once every quarterand a majority of banks have already said that there is anupward bias on interest rates, hinting they can hike rates.