Mumbai, July 29 (IANS) Public sector lenders Punjab National Bank, Allahabad Bank and Oriental Bank of Commerce said Friday they will hike lending and deposit rates by up to 75 basis points, effective Monday, in response to the Reserve Bank of India’s 50 basis points increase in key policy rates.
Punjab National Bank will increase lending as well as deposit rates by 75 basis points. The bank’s base rate will be increased to 10.75 percent and benchmark prime lending rates hiked to 14.25 percent.
Allahabad Bank will increase lending and deposit rates by 50 basis points. Its base rate will be increased to 10.75 from the existing 10.25 percent and the benchmark prime lending rate hiked to 15 percent from the existing 14.50 percent. The new rates will be effective from Monday.
Another public sector lender, Oriental Bank of Commerce also has announced that it would hike its benchmark prime lending rate and base rate by 50 basis points each effective Aug 1.
Most lenders are expected to pass on to consumers the recent hike in policy rates by the Reserve Bank of India.
The RBI July 26 hiked key policy rates by 50 basis points in the 11th such exercise since January 2010 to tame inflation. The repurchase rate, the interest the central bank levies on short-term borrowing by commercial banks, has been hiked to 8 percent from 7.5 percent and reverse repurchase rate, or interest paid on short-term lending, raised to 7 percent from 6.5 percent.
