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Our Bureau

Mumbai, Aug 6 Union Bank of India and IndusInd Bank have hiked their prime lending rates by 75 basis points. This will lead to a hike in the interest rates of floating loans.

Union Bank of India raised its benchmark prime lending rate to 14 per cent from 13.25 per cent with effect from August 8. IndusInd Bank raised its PLR to 17 per cent from 16.25 per cent.

These are the latest among several banks that have increased prime lending rates, after the Reserve Bank of India increased key rates in the first quarter review of its annual Monetary Policy, last month.

A press release from Union Bank of India here on Wednesday said the increase would impact advances with floating interest rate structure linked to BPLR. However, existing home loans will not be impacted by the hike.

In order to encourage education loans, the bank has exempt education loans from the hike, the release said.

In case of IndusInd Bank, all loans except those under the consumer finance division would be impacted by the hike, said a senior official from the bank.

While the bank does not have a major portfolio of home loans, it has a strong presence in auto and commercial vehicle segment. But as they are fixed rate loans, they will not be impacted by the hike, the official added.

Other banks and institutions that have increased PLR after RBI’s latest rate hikes include ICICI Bank, HDFC, Punjab National Bank, Axis Bank, IDBI Bank and YES Bank.

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