HDFC Bank increases interest rates again

HDFC Bank, which had increased its prime lending rates by 25 basis points last month, has decided to raise its key lending rates by another 75 basis points to 16 per cent. The increase is effective from today. A 50-100 basis points revision in the deposit rates across maturities will come into effect from Thursday.

HDFC Bank, Jammu & Kashmir Bank, Yes Bank and IndusInd Bank are among the handful of players which have increased the rates by 25 to 100 basis points following the RBI's June 11 decision to raise the repo rates by 25 basis points.

But with inflation touching 11.05 per cent, the central bank was last week forced to raise the repo rates by another 50 basis points to 8.50 per cent. The banking regulator also raised the cash reserve ratio, or the proportion of deposits set aside by banks, by 50 basis points to 8.75 per cent. This forced lenders, ranging from State Bank of India to ICICI Bank and HDFC, to increase the lending and deposit rates.

IDBI Bank, the erstwhile development financial institution, has decided to raise its PLR by 50 basis points to 13.75 per cent a year with immediate effect. It will also hike the term-deposit rates by 25-75 basis points across maturity buckets with effect from July 4.

Andhra Bank has raised the PLR by 50 basis points to 13.25 per cent, while Bank of Maharashtra has increased the term deposit rates by 25 basis points across select slabs with effect from today.