Two state-owned lenders Indian Bank and Indian Overseas Bank on Friday announced raising their minimum benchmark lending rate by up to 50 basis points.
Private sector lender Karur Vysya Bank also raised its deposit and lending rates by up to 50 basis points across various maturities.
Interest rate on 91 days to six months fixed deposit has been raised by 50 basis points to 5.75 per cent while 9-12 months would attract 6.5 per cent, 25 basis points higher than existing rate with effect from October 4, Karur Vysya Bank informed the Bombay Stock Exchange.
The bank has also increased its base rate, the minimum rate below which a bank cannot offer loans, by 50 basis points to 9 per cent.
At the same time, Chennai-based Indian Bank also raised its base rate by 50 basis points to 8.5 per cent while Indian Overseas Bank hiked it by 25 basis points to 8.5 per cent effective October 1. This will make loans costlier for the new borrowers.
However, State Bank of Bikaner and Jaipur retained its Base Rate at 7.75 per cent till December this year.
As per RBI guideline, banks have to review their base rates every quarter. This is the first review of the rates since it was introduced in July this year.
Both the banks increased Benchmark Prime Lending Rate (BPLR) by 25 basis points making loans costlier for the existing borrower.
Yesterday, as many as seven banks, including SBI and PNB raised interest rates.
Country's largest lender SBI increased its deposit rates up to 75 basis points to attract depositors to their fold, who have been getting negative returns when adjusted for inflation.
Axis Bank and Kotak Mahindra Bank, and foreign lender Standard Chartered Bank, raised base rate by 25 basis points.
Taking note of the negative real rates to the savers, in view of high inflation, PNB raised interest rate on fixed deposit by 25-50 basis points across various maturities, while IDBI Bank hiked its rates by 15-50 basis points on various slabs.