Thursday, February 10, 2011

IDBI Bank to increase its lending rates - Finance news

Mumbai: Public sector lender IDBI Bank today increased its minimum rate of lending or the base rate by 0.5 percent to 9.50 percent and benchmark prime lending rate (BPLR) by 0.25 percent to 14 percent, a release issued by the bank said.

Private sector lender DCB has also announced an upward revision in base rate to 9 percent from 8.5 percent and the BPLR by 50 basis points to 16.25 percent, according to a press release.

The base rate system replaced the BPLR last July to make lending more transparent. Some older loans given under the BPLR are yet to migrate on to the base rate system.

IDBI Bank's move follows others like Dena Bank, Bank of India, Union Bank of India, Indian Overseas Bank, Syndicate Bank which have also upped their base rate following the Reserve Bank's January 25 announcement to hike its key rates--the repo at which it lends and the reverse repo at which it collects extra cash, by 0.25 percent each.

The lending rate hikes were prompted by increase in cost of funds, where deposit rates have been increased up to 125 basis points, and keeping in view the market conditions, IDBI Bank said.

Meanwhile, IDBI Bank has also increased its interest offering for term deposits by up to 1.25 percent depending on maturities. Under the revised rate structure, a 15-45-day deposit up to 1 crore will fetch an interest of 4.50 percent per annum, up from earlier 3.25 percent, the bank statement said.

Source: IDBI Bank to increase its lending rates - Finance news

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