The domestic interest rate cycle has almost peaked and any further hike could be limited at the most to 25-50 basis points, according to Mr Aditya Puri, Managing Director, HDFC Bank.
“We are probably near the peak of the interest rate cycle. I don't expect a three or four percentage points increase from here. The increase could be 25 to 50 basis points,” said Mr Puri after launching the bank's ‘by invitation only' credit-card for the super rich.
Infinia Credit Card
The Infinia credit-card has no pre-set spend limits, that is, cardholders can spend beyond their credit limit. Among others, it offers unlimited access and usage at more than 600 airport lounges across the world; air accident cover of Rs 3 crore; and emergency hospitalisation cover of Rs 50 lakh.
The bank, however, did not disclose the net-worth criteria for offering the card to potential customers. The card will initially be offered to a select 5,000 individuals.
To get the card, customers will have to pay a joining fee of Rs 30,000. The annual renewal fee will be Rs 10,000.
Retail assets
According to Mr Puri, the likely moderation in the GDP growth from 8.5 per cent to 8 per cent in FY2012 could find a reflection in HDFC Bank's retail assets growth. However, the decline in GDP was unlikely to lead to any drastic deterioration in asset quality.
Currently, consumer banking accounts for 50 per cent of the private sector lender's loan book and corporate banking accounts for the rest.
Rate increases
India's second largest private sector bank has upped its key benchmark lending rates by 25 basis points with effect from Tuesday.
Post the revision, the base rate and the benchmark prime lending rate (BPLR) are 9.50 per cent and 18 per cent respectively.
On Tuesday, Bank of Baroda also increased its base rate and BPLR by 25 bps each with immediate effect to 10.25 per cent and 14.50 per cent respectively.
The public sector bank also increased fixed deposit rates by 25 bps on short-term deposits up to 270 days maturity.
Kotak Mahindra Bank has revised its base rate and BPLR by 25 bps each to 9.50 per cent and 18.25 per cent, respectively, with effect from Wednesday.
In the last fortnight, a host of banks, including State Bank of India, Canara Bank, ICICI Bank, Indian Overseas Bank, and Corporation Bank, have increased their lending rate benchmarks in response to the Reserve Bank of India upping its short-term interest rates in June to fight off surging inflationary pressures.