HDFC Bank to raise lending rates by 50 bps

Country's second largest private lender HDFC Bank hasdecided to raise its lending rates by 50 basis points in line with its peersmaking its home, auto and corporate loans more expensive.

The base rate, or the minimum lending rate, of HDFC Bankwill become 10 per cent from the existing 9.50 per cent, sources said.

At the same time, the benchmark prime lending rate (BPLR) ofthe bank is expected to be increased by similar percentage points to 18.50 percent.

The bank has also decided to raise fixed deposits rates byup to 75 basis points on the select maturities effective tomorrow, sourcessaid.

HDFC Bank's fixed deposit rate in the 1 year 1 day to 1 year15 days basket is likely to be 9 per cent per annum as against existing 8.25per cent, an increase of 75 basis points.

Besides, interest rate for term deposits between 46-60 dayswill go up by 25 basis points to 7 per cent from the prevailing 6.75 per cent.

However, interest rates on other fixed deposits have beenleft unchanged.

On Thursday, country's top two lenders SBI and ICICI Bank announced hike in lending rates by 50 basis points each in response to tightmonetary policy of the central bank.

Both SBI and ICICI have increased the base rate, or theminimum lending rate, to 10 per cent from the existing 9.50 per cent.

Following the Reserve Bank's decision to raise short-termkey rates in its first quarter review of monetary policy last month, lendershave responded by increasing interest rates.

Major lenders, including Punjab National Bank, Bank ofBaroda, Oriental Bank of Commerce, have raised interest rates.

Almost all major banks have hiked their interest rates inthe range of 25-100 basis points. 

The RBI had hiked its key short-term lending rates by ahigher-than-expected 50 basis points on July 26 to tame the uncomfortably highinflation number, which stood at 9.44 per cent in June.

This was the 11th hike by the central bank since March 2010,when it switched over from the monetary policy loosening stance adopted duringthe financial slowdown to one for curbing inflation.