ICICI Bank raises lending rates by 50 basis points

Country's largest private lender ICICI Bank today announced a hike in lending rates by 50 basis points.

Country's largest private lender ICICI Bank on Thursday announced a hike in lending rates by 50 basis points.

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The bank raised the base rate, or the minimum lending rate, from 9.50% to 10%, effective from August 13, ICICI Bank said in a statement.

ICICI Bank has also announced an increase of 0.50% in its benchmark prime lending rate and in its floating reference rate (FRR) for consumer loans (including home loans), it said.

The fixed rate customers will not be impacted by above hike and their contracted rates will remain unchanged, it said.

Following the Reserve Bank's decision to raise short-term key rates in its first quarter review of monetary policy last month, lenders have responded by increasing interest rates. Major lenders including SBI, Punjab National Bank, Bank of Baroda, Oriental Bank of Commerce have raised interest rates.

In the major bank category, HDFC Bank is the only bank which have not so far raised rates following July 26 policy rate hike.

The RBI had raised the short-term lending (repo) rate by 50 basis points to 8% and the short-term borrowing (reverse repo) rate by a same margin to 7%. The central bank had hiked key policy rates 11 times since March 2010 in its bid to tame inflation.

Subsequently, the interest rate under the Marginal Standing Facility, an additional borrowing window, has gone up to 9% from the earlier level of 8.5%.