CORPORATION BANK HIKES LENDING RATE BY 0.50 PC

Corporation Bank hiked its prime lending rate by 50 basis points from 12 per cent to 12.50 per cent with effect from August 2, 2010.

Last week, Punjab National Bank (PNB) and Union Bank of India had revised their BPLRs. PNB upped its rate to 11.75 per cent from 11 per cent with effect from August 1. Union Bank has increased it to 12.25 per cent from 11.75 per cent, to be effective from August 4. Other banks are likely to follow suit.

Interest rate hikes have been triggered by the Reserve Bank's recent decision to raise its short-term lending (repo) rates by 0.25 per cent to 5.75 per cent and borrowing (reverse repo) rates by 0.5 per cent to 4.5 per cent, to check inflation that is in double digits.

Several lenders including ICICI Bank, PNB and HDFC Bank have increased deposit rates after the RBI move.

Rising lending and deposit rates will eventually make auto, home and commercial loans expensive. 

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Corporation-Bank-hikes-lending-rate-by-050-pc/articleshow/6247482.cms