In a move that will make home, automobile and commercial loans dearer, almost all the banks in the country have raised their interest rates, following the Reserve Bank of India's (RBI) more-than-expected hike in interest rates.
Most of the lenders raised rates by 50 basis points, while IDBI Bank, Punjab National Bank and Bank of India hiked both base rate and BPLR by 75 basis points each.
However, state-owned Corporation Bank, revised base rates by 40 basis points, which is the lowest among the lenders.
The hikes are effective 1 August 2011, except for Yes Bank (effective July 26) and Bank of India (from July 28).
The latest to join bandwagon is Dhanlaxmi Bank Ltd, with the private lender raising base rate to 10.75 per cent from 10.25 per cent and benchmark prime lending rates (BPLR) to 20.25 percent from 19.25 per cent. The hikes are effective 1 August 2011, it said in a stock exchange statement.
The country's central bank, RBI, raised its rates by 50 basis points, the 11th hike since March 2010 to combact an ever-increasing inflation. The rate rise also sent bond yields and swap rates higher, and stocks prices lower.