Corporation Bank hikes base rate by 50 bps

Public sector lender Corporation Bank today announced a 50-basis point (bps) hike in its base rate-- the minimum rate below which it cannot lend-- to 9.4%.

The hike comes within a fortnight of the Reserve Bank of India (RBI) announcing an increase in its key short-term lending and borrowing rates by 25 bps.

Corporation Bank's benchmark prime lending rate (BPLR) would also go up by 35 bps. The new rates are effective from February 14.

"The bank has revised its BPLR from 13.25% per annum to 13.60% per annum... And the base rate for lending from 8.9% to 9.4% with effect from February 14," the bank said in a filing to the Bombay Stock Exchange.

The hike follows similar moves by other state and private lenders to increase lending rates during the last few days.

Indian Bank, Indian Overseas Bank, Bank of Baroda, Bank of India have increased their lending rates 25-50 bps.

The base rate system has replaced the BPLR system with effect from July 1, 2010. However, BPLR regime continues for the old borrowers.