The bank has, however, kept its base rate or minimum lending rate, unchanged at 9.75%
ICICI Bank, the largest private sector lender in the country, has increased domestic term deposit rates in select maturities by 50-75 basis points. The rate hike is effective from today and is applicable only on retail deposits maturing in 46 days to 389 days.
The bank has, however, kept its base rate or minimum lending rate unchanged at 9.75%. The private lender currently offers maximum nine% on retail term deposits that mature in 390 days to two years.
Karnataka Bank has also raised its deposit rates 25-50 basis points across maturities, effective Monday.
Facing pressure from rising cost of funds, Andhra Bank has decided to hike lending rate by 25 bps from August 19. It has raised base rate to 10.25 per cent. It also hiked benchmark prime lending rate to 14.50 per cent. Following RBI’s first quarter review of monetary policy on July 30, several private sector banks, including HDFC Bank, Axis Bank and YES Bank, had raised term deposit rates by 25-225 basis points.
Several other private sector banks including HDFC Bank, Axis Bank and YES Bank had raised their term deposit rates by 25-225 basis points following the Reserve Bank of India's (RBI) first quarter review of monetary policy on July 30, 2013. A few lenders like HDFC Bank and YES Bank have even increased their base rates by 20-25 basis points.
ICICI Bank had initially said it will watch the market before revising its interest rates.
"Market rates at the very short-end have gone up. But the impact on our total cost of funds is small, because our dependence on short-term and wholesale deposits is limited. Right now, it is too early to arrive at a conclusion (on increasing deposit and lending rates). We will watch the market," Chanda Kochhar, managing director and chief executive officer of ICICI Bank, had said after the central bank's monetary policy review.
While RBI had kept the key policy rate unchanged on July 30, 2013 its liquidity tightening measures in the past few weeks have impacted the short-term rates.
On July 15, 2013 the central bank capped banks' borrowings under the liquidity adjustment facility (LAF) and increased the marginal standing facility (MSF) rate by 200 basis points to 10.25%.
The measures led to tightness in liquidity. Bankers had predicted if the steps were not rolled back soon short-term deposit rates would increase.
Project will be financed by credit from International Development Association