Business Daily from THE HINDU group of publications
Wednesday, Jan 03, 2007
ePaper
Business Daily from THE HINDU group of publications Wednesday, Jan 03, 2007 ePaper |
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Money & Banking
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Interest Rates
Our Bureau
Chennai , Jan. 2 Signalling costlier money for corporate India this year, top public sector banks have raised their lending rates over the past week. These banks have hiked their benchmark prime lending rates (the rates that, theoretically, are given to the best borrowers) by between 0.25 percentage point and 0.50 percentage point. State Bank of India pushing up rates by 50 basis points to 11.50 per cent, a week ago, flagged off the latest round of hikes. The other banks such as Punjab National Bank, Bank of Baroda, Bank of India and Canara Bank have followed in quick succession. The lending rate hikes have followed a hike in deposit rates of between 0.25 bps and 0.75 bps during the past three weeks. This was close on the heels of a 0.50 per centage point hike in cash credit ratio (the amount parked with the RBI by banks). Banks have been trying to mop up more deposits, anticipating tighter liquidity conditions in the money market. This seems to have reflected partially in the spike in call money rates during the past week. Call money rates, which were in the range of 6 per cent shot up to nearly 20 per cent. Besides, banks also turned borrowers from the RBI in that period in contrast to parking surpluses earlier. This fiscal has already seen three rounds of lending rate hikes in May 2006, September 2006 and now the latest with effect from end-December and January 2007. Taken together, these hikes have pushed interest rates up by one percentage point already. Top private sector banks such as ICICI Bank and HDFC Bank have hiked their prime lending rates similarly, a fortnight ago, and they are currently at between 13.50 per cent and 13.75 per cent.
Syndicate Bank
Our Bangalore Bureau reports: Syndicate Bank has hiked its benchmark prime-lending rate by 25 basis points effective January 1. A bank release said the new rate is 11.75 per cent. The hike was in line with the series of increases that have been made by the public and private sector banks following the lead set by SBI. Meanwhile, Vijaya Bank has hiked its term deposit rates in a bid to accelerate deposit mobilisation efforts. The rate hikes were by 75 basis points for maturities up to three years.
State Bank of Travancore
Our Thiruvananthapuram Bureau reports: State Bank of Travancore has revised upwards the benchmark prime lending rate (PLR) to 12 per cent from the existing 11.50 per cent with effect from January 1. Announcing this, a bank spokesman said that, following this, the interest rates for all personal segment banking (PSB) products would also be revised accordingly.
More Stories on : Interest Rates | State Bank of India | Oriental Bank of Commerce | Punjab National Bank
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