HDFC Bank may raise lending rates soon

HDFC Bank Ltd may increase its lending rates within a few weeks depending on market conditions following its decision to raise deposit rates by between 25 basis points and 75 basis points, Paresh Sukthankar, an executive director of the bank, has said.

The shorter term deposit rates of the bank typically reflected overnight call money rates or repo rates, he said. Deposit rates for 91 days to one year will rise by about 75 basis points, while rates for deposits longer than one year and two years will rise by 25 basis points.

The banking system has been in net deficit and there was expectation that rates would decline once money paid as telecom licence fees comes back into the system.