OBC raises lending rate by 50 bps

State-owned Oriental Bank of Commerce (OBC) on Wednesday said it had hiked its base rate, below which banks can’t offer loans, by 50 basis points (bps) to 8.5 per cent.

The base rate has been increased to 8.5 per cent with effect from October 1, said a senior OBC official. With an increase in base rate, all kinds of loans including housing, auto and education loans will get dearer by at least 50 bps (0.5 per cent).

Since last week, 11 banks, including ICICI, HDFC, PNB, IDBI and Allahabad Bank have hiked their base rates by up to 50 bps. Deposit rates and consequently the cost of funds have increased, necessitating an increase in the base rate, the official said.