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SBI, three others raise rates

NEW DELHI: Three banks, State Bank of India (SBI), ICICI Bank, Indian Overseas Bank, and a housing finance major, HDFC, have increased their lending and deposit rates. The revised rates take effect from July 1.

Home and auto financing loans from State Bank of India (SBI) are set to cost more as the bank has decided to raise its rate of interest by 50 basis points on all credit packages linked to prime lending rates (PLR).

Speaking at a function on Monday at Ghaziabad near here, SBI Chairman-cum-Managing Director O. P. Bhatt revealed that the interest rate on all loans, including home and auto loans, which are linked to the PLR would be higher by 0.5 percentage point. The revision in interest rates on loans, as a pass-through to borrowers, has come about following the hike in SBI’s PLR from 12.25 per cent to 12.75 per cent last week. The bank had already increased the interest rate on fixed deposits by up to 75 basis points which were to be effective from June 30, as announced earlier.

Oommen Ninan writes from Mumbai:

ICICI Bank has announced an increase in interest rates on fixed deposits of less than Rs. 15 lakh by 50-100 basis points with effect from July 1. The bank has also announced an increase of 75 basis points in its floating reference rate (FRR) for consumer loans (including home loans) with effect from June 30. The revised FRR will be 13.50 per cent per annum as against 12.75 per cent per annum at present. For existing floating rate customers, the increase in FRR will be effective from July 1. It has also announced an increase of 0.75 percentage point in its Benchmark Advance Rate (I-BAR). The revised I-BAR will be 16.50 per cent per annum as against 15.75 per cent now.

HDFC, the housing finance major, has increased its interest rates on home loans with effect from July 1. It has increased its Retail Prime Lending Rate (RPLR) on which its Adjustable Rate Home Loan (ARHL) is benchmarked, by 50 basis points. The increase in RPLR will affect existing borrowers whose loans come up for re-pricing on or after July 1. HDFC follows a three month reset cycle for its floating rate loans and hence the change in RPLR will impact the existing customers only over the next three month period.

For new home loan customers, the ARHL loans will now be priced at a minimum of 11 per cent per annum while the fixed rates will be at 14 per cent. It has also increased its rates on deposits by 50 basis points across most maturities.

Effective July 1, Indian Overseas Bank has revised its benchmark prime lending rate (BPLR) by 25 basis points on account of increase in the cost of funds. However, existing housing loans which have been disbursed fully or partially are exempt from this interest rate hike, says a bank release.

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