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Punjab National Bank (PNB), the country's largest nationalised bank by assets, on Monday said that it was hiking its base rate as well as benchmark prime lending rate (BPLR) by 50 basis points each.
This move comes in response to the Reserve Bank of India's recent decision to hike policy rates by 25 basis points and also on account of the rising yield of market instruments, a PNB release said here.
From February 1, the base rate of the bank will be 9.5 per cent as against 9 per cent earlier. The BPLR will also stand raised by 50 basis points to 13 per cent from Tuesday. PNB had last increased its base rate to 9 per cent last month. The BPLR too was last revised upwards in December 2010.
Meanwhile, PNB has also decided to raise interest rates on domestic term deposits by 25 to 100 basis points across various maturity buckets. With this revision, the peak rate on single domestic retail term deposit will now be 9.25 per cent for maturity period of 1,111 days.
The decision to hike the rates has been taken for better transmission of monetary policy measures and high interest rates prevailing in the market. With the current hike in BPLR/base rate, the lending rates on schemes linked to BPLR/base rate would go up accordingly.
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