HDFC Bank pegs base rate at a low 7.25 per cent

HDFC Bank, India's second biggest private sector lender, toady announced a base rate for lending of 7.25 per cent, 25 basis points below that set by the State Bank of India (SBI), projecting a leaner and stronger look.

State Bank of India, the country's largest lender, yesterday set its base rate for loans at 7.5 per cent while other state-run banks like Punjab National Bank (PNB), Bank of Baroda (BoB), Union Bank and Central Bank of India fixed their base rate for lending at a uniform 8.0 per cent.

Paresh Sukthankar, executive director of HDFC Bank, on Tuesday said he expected banks to fix their base rate in the 6.75-8.50 range.

"The base rate across banks will reflect lending rates in the market. Lending rates in the market have shown some upward bias in the last few months and the trend is probably expected to continue for the next couple of months as well," he had said.

Banks are fixing new base lending rates as part of the new RBI rule that requires banks to set their minimum lending rates.