HSBC ups lending, deposit rates by 50 bps

After over a dozen domestic banks increased their lending rates in the range of 25-100 basis points (bps) following the recent RBI tightening, HSBC India today became the first leading foreign lender in India to join the chorus with a 50-bps hike.

The Hongkong and Shanghai Banking Corporation India, which announced a 33% rise in pre-tax profit to $451 million yesterday, today revised upwards its base rate by 50 bps from to 9.75 from 9.25%, effective yesterday.

It however, did not disclose its effective lending rates. When asked a spokesperson said they follow only the base rate.

The new rate will be applicable to all existing and new variable rate mortgage loans, the bank said in a release, adding the decision follows the recent 50 bps increase in the repo and reverse rates by the RBI.

The country's one of the oldest foreign bank also hiked its interest rates on resident/NRO fixed deposits by 50 bps for a term of 365 days. With this, HSBC India will now offer an interest of 9% a year to its customers for this tenure and 9.5% to senior citizens.

Almost all the leading banks, barring the big three -- SBI, ICICI and HDFC -- have increased their lending rates after July 26, when the Reserve Bank for the 11th time since March 2010, increased the interest rates by 50 bps to tame inflation, which is ruling close to 10%.