State Bank of India (SBI), ICICI Bank and HDFC Bank, raised their lending and deposit rates by up to one percentage point on the eve of the new year.
While the hike in lending rate would make auto, home and commercial loans expensive, increase in deposit rates will ensure better returns for depositors.
In line with market trend, SBI announced increase in its base rate or the minimum lending rate by 40 basis points to 8 per cent.
The fixed deposits with SBI would fetch high interest. The bank would give highest return of 9 per cent for deposits of 555 days and 1,000 days, up from 8.5 per cent.
The highest increase of one per cent was in fixed deposits with maturity between 7-14 days. The short term FDs would fetch an interest rate of 4 per cent from the existing 3 per cent.
SBI also raised the benchmark prime lending rate by 25 basis points to 12.75 per cent. This will make EMIs for the existing loan dearer by at least 25 basis points.
The new rates would be effective from January 3.
Meanwhile, HDFC Bank has decided to increase its Base Rate by 25 basis points to 7.75 per cent.
Besides ICICI, Kotak Mahindra Bank and Dhanlaxmi Bank also increased base rates by up to 75 basis points.
ICICI Bank has announced an increase of 0.5 per cent in the Base Rate with effect from January 3, 2011. The revised rate will be 8.25 per cent as against 7.75 per cent at present.
ICICI Bank has also announced an increase of 0.25 per cent in its benchmark prime-lending rate (BPLR) and in its Floating Reference Rate (FRR) for consumer loans (including home loans) with effect from January 3, 2011.
The BPLR is used for determining interest rates on loans and advances sanctioned up to June 30, 2010.
ICICI said the fixed rate customers will not be impacted by the above increase and their contracted rates will remain unchanged.
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