| ICICI, Union Bank hike deposit rates |
MUMBAI Two Indian banks on Saturday hiked deposit rates across various maturities by up to 1 per cent with immediate effect, signalling a possible hike in lending rates as well.
“We have increased our deposit rates effective today across various maturities,” ICICI Bank managing director and CEO Chanda Kochhar said. “The increase is more or less by 0.25 per cent. In some tenors, the hike is by 0.5-0.75 per cent,”
Punjab National Bank on Friday raised its benchmark prime lending rate to 11.75 per cent, up 75 basis points.
ICICI’s announcement came shortly after state-owned lender Union Bank raised deposit rates by up to 1 per cent. Taking a cue from RBI’s monetary policy actions, Union Bank of India has hiked its lending and deposit rates with effect from August 4.
The bank has increased the deposit rates by 0.25-1 per cent across maturities. It has also raised the benchmark prime lending rates (BPLR) by 0.5 per cent to 12.25 per cent from 11.75 per cent, according to a release from the bank.
After the Reserve Bank increased its policy rates earlier this week, a host of other banks, including HDFC Bank, Kotak Mahindra, Central Bank and Lakshmi Vilas Bank, have also raised their deposit rates.
There was a possibility that the lending rates of ICICI Bank could be hiked in the future, Kochhar said, but added that a decision in this regard will be taken after assessing the overall impact on the cost of funds.
“It (hike in lending rates) is quite possible,” she said.
To fight inflation, which stood at 10.6 per cent in June, the RBI, on July 27, hiked its overnight lending rate (repo) by 0.25 per cent to 5.75 per cent and the reverse repo, at which it borrows from banks, by 0.5 per cent to 4.5 per cent.
Press Trust of India
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