Public sector lender IDBI Bank on Saturday hiked interest rates for select category of educational loans and also retail term deposit rates by up to 50 basis points but left the base rate unchanged.
“We have not hiked the base rate for now...the demand for credit is slow and we have also decided to look at the liquidity conditions,” executive director and chief financial officer R.K. Bansal, said after a meeting of its ALCO (asset-liability committee) here.
Though it has been widely expected that banks would pass on the extra burden to the borrowers after the Reserve Bank increased for the 10th time its key policy rates by 25 bps on June 16 in its mid—quarter policy review, no bank had so far bite the bullet as credit offtake is weak.
Even IDBI Bank had also hinted at a move to hike its lending rates on the policy review day. Instead the bank has opted to reprise its assets on the education side.
The city-based lender has decided to increase the lending rate by 25 basis points on education loans of between Rs. 7.5 lakh and Rs. 20 lakh, while for loans up to Rs. 7.5 lakh, it has cut the rates by between 25 and 50 bps.
“The re-jigging in educational loans is to align ourselves with the market and will also help us achieve priority sector lending targets,” Bansal said.
On the deposit rates side, it said deposits under Rs. 15 lakh in the 270-365 days maturity will now yield 9 per cent, up 50 bps.
