Taking the cue from RBI, once again, the major financial institutions in India – ICICI Bank, HDFC, Axis Bank, Yes Bank and PNB, to name a few – have increased the interest rates charged on various loans, like home loans, personal loans and car / auto loans. The good news is – most of them have also upped the interest rates offered to fixed deposit customers.
| It is the same story as a month ago – inflation is at multi-year highs, and doesn’t seem to be coming down anytime soon, and the Reserve Bank of India (RBI) had increased the repo rate and the cash reserve ratio (CRR) yet again. |
(Looking for interest rates offered to NRIs by these banks? Please read “Banks increase interest rate on deposits for Non Resident Indians (NRIs)“).
Most Indian banks have increased their lending and deposit rates as a response to this move by the RBI.
While this is good news for people investing in fixed / term deposits, it is bad news for borrowers – be it home loans, car loans or personal loans.
Here are the details of the rate hikes:
(Please note that almost all banks offer an additional 0.5% on deposits made by Senior Citizens. This is an extra 0.5% return, over and above the rate normally offered by the bank of deposits)
ICICI Bank
ICICI bank has increased it benchmark advance rate (BAR) by 0.75% to 17.25%. The floating reference rate (FRR) for consumer loans has also been increased by 0.75% to 14.25%.
ICICI bank has also hiked the interest rate offered on fixed deposits by 0.5% to 1%, starting 1st August.
State Bank of India (SBI)
State Bank of India (SBI) has raised its benchmark prime lending rate (BPLR) by 1% to 13.75%. But the hike is not applicable
to existing educational loans, existing auto / car loans, and new and existing housing loans upto Rs. 30 Lakhs. This increase
is effective from 12th August 2008.
SBI has increased the PLR for new auto / car loans by 0.5%.
SBI has also raised its rates for fixed deposits by 0.25% to 0.75% depending on the maturity / tenure of the deposit. This
hike is effective from 16th August 2008.
HDFC Bank
HDFC Bank has raised its PLR by 0.5% to 16.5%.
HDFC Bank has also hiked its deposit rates for fixed deposits having maturity of one year or more. These rates have been increased by 0.5%.
The new rate for a deposit having a maturity of over a year would be 9%.
HDFC (Home Loans)
HDFC has upped its retail prime lending rate (RPLR) by 0.75% to 15%. It has increased the adjustable or floating rate of interest for home loans for new borrowers to 11.75%. The fixed rate has not been changes, and remains at 14%.
Punjab National bank (PNB)
PNB has increased its PLR by 1% to 14%. It has also hiked the deposit rates by 0.75% to 1%, and the maximum fixed deposit rate on offer now is 9.75%.
Axis Bank
Axis bank has increased its PLR by 0.5% to 15.75%.
IDBI Bank
IDBI Bank has raised its benchmark prime lending rate (BPLR) by 0.5% to 14.25%.
Reliance Capital
Reliance Capital has raised its rates for property loans by 0.5% to 14.25%.
Bank of Rajasthan
Bank of Rajasthan has raised its benchmark PLR (BPLR) by 1% to 16%. It has also increased its RPLR by 0.5% to 10%.
Yes Bank
Yes Bank has raised its BPLR by 0.5% to 17%. It has also increased its fixed deposit rates.
State Bank of Travancore (SBT)
SBT has raised its BPLR by 0.5% to 14%.
ING Vysys Bank
ING Vysys has raised its BPLR by 0.5% to 16.25%.
Punjab and Sind Bank (P & SB)
P & SB has raised its BPLR by 0.75%.
Oriental Bank of Commerce (OBC)
OBC has raised its PLR by 0.5% to 13.75%.
Allahabad Bank
Allahabad Bank has raised its BPLR by 0.5% to 14%. But it should be noted that it is applicable
only for new loans – the interest rates for existing customers would not be increased.
Also, the old rates would continue for new housing loans below Rs. 30 Lakhs.
Allahabad Bank has hiked its deposit rates for fixed deposits of various maturities. The maximum interest rate now
stands at 9.75% for a term deposit of 1-3 years.
Syndicate Bank
Syndicate Bank has raised its benchmark PLR (BPLR) by 0.5% to 14%.
Syndicate Bank has also hiked its deposit rates for fixed deposits having maturity of one year or more. This rate has been increased by 0.5%.
Vijaya Bank
Vijaya Bank has raised its benchmark PLR (BPLR) by 0.5% to 14%. But the hike is not applicable
to all new educational loans and new housing loans upto Rs. 30 Lakhs.
Vijaya Bank has also introduced a special new fixed deposit for the festive season. Called “V Utsav“, this is a fixed deposit for
500 days, and carries an interest rate of 9.75% per year. This new fixed deposit can be opened upto 31st October 2008.
Bank of Baroda (BoB)
Bank of Baroda has raised its PLR by 0.5%. This hike would not be applicable to new and existing housing loans upto Rs. 30 Lakhs.
BoB has not made any changes to its fixed deposit rates.
United Bank (UB)
United Bank has raised its PLR by 0.75%. This hike would not be applicable to new and existing housing loans upto Rs. 30 Lakhs.
United Bank has not made any changes to its fixed deposit rates.
Bank of India (BoI)
Bank of India (BoI) has raised its BPLR by 0.75% to 14%.
Central Bank
Central Bank has raised its BPLR by 1% to 14%. However, this hike would not be applicable for new educational loans, and
for new housing / home laons upto Rs. 20 Lakhs.
Indian Bank
Indian Bank has raised its BPLR by 0.75% to 14%. However, this hike would not be applicable for new and existing educational loans, and
for new and existing housing / home laons upto Rs. 30 Lakhs.
Indian Bank has also hiked its deposit rates for fixed deposits having across all maturities.
(Please note that almost all banks offer an additional 0.5% on deposits made by Senior Citizens. This is an extra 0.5% return, over and above the rate normally offered by the bank of deposits)
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