ICICI Bank ups deposit rates by 0.25-0.75%

India's second-largest lender, ICICI Bank, today hiked deposit rates across various maturities by up to 0.75 per cent with immediate effect, signalling a possible hike in lending rates as well.

"We have increased our deposit rates effective today across various maturities. The increase is more or less by 0.25 per cent. In some tenors, the hike is by 0.5-0.75 per cent," ICICI Bank Managing Director and CEO Chanda Kochhar told reporters here.

The announcement came shortly after state-owned lender Union Bank raised deposit rates by up to 1 per cent. Union Bank also increased its benchmark lending rate by 50 basis points to 12.25 per cent.

After the Reserve Bank increased its policy rates earlier this week, Punjab National Bank yesterday was the first to raise the Benchmark Prime Lending Rate. It hiked the BPLR to 11.75 per cent, up 75 basis points.

A host of other banks, including HDFC Bank, Kotak Mahindra, Central Bank and Lakshmi Vilas Bank, have also upped their deposit rates.

There was a possibility that the lending rates of ICICI Bank could be hiked in the future, Kochhar said, but added that a decision in this regard will be taken after assessing the overall impact on the cost of funds.

"It (hike in lending rates) is quite possible," she said.

To fight inflation, which stood at 10.6 per cent in June, the RBI, on July 27, hiked its overnight lending rate (repo) by 0.25 per cent to 5.75 per cent and the reverse repo, at which it borrows from banks, by 0.5 per cent to 4.5 per cent.