Base rate won't hit margins: HDFC Bank

Private sector HDFC Bank today said that it sees no major impact on its profitability or growth due to the introduction of the base rate, below which banks won't be able to lend to individuals and corporate borrowers.

While the bank did not disclose its own rate, which will be announced tomorrow, it said it expects most banks to peg it between 6.5 to 8 per cent.

"I don't expect any major impact, either on our growth or profitability, because of the base rate coming in," Bank's Executive Director Paresh Sukthankar told reporters here.

However, there may be some rise in the rate on the short-end corporate loans, he said.

Asked about HDFC Bank's credit growth, Sukthankar said that it is likely to be above 20 per cent for the fiscal.

The bank has witnessed a healthy growth in its corporate and consumer loans portfolio, so far, this year, with growth in corporate loans out-pacing that of consumer advances.

"Consumer loans this fiscal are expected to grow faster than last fiscal but growth in corporate loans would be higher," he said.