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ICICI Bank jacks up auto loan rates by 0.75 per cent

ICICI Bank jacks up auto loan rates by 0.75 per cent

The hike comes even before the RBI decided to increase statutory deposits.

New Delhi: Country's largest private sector lender ICICI Bank jacked up auto loan interest rates by up to 0.75 per cent even before the RBI decided to increase statutory deposits last week as a part of inflation controlling measure.

"Rates have increased in between 50-75 basis points for certain segment of auto loans from the first week of April,” ICICI Bank Group Business (Head) Vehicle Loans N R Narayanan told PTI.

"The decision to increase auto loan was taken in March, but we kept it on hold till the beginning of the new fiscal,"he said.

Auto loan prior to the hike, he said, was in the range of 13.5-14 per cent, which have gone up by 0.75 per cent during the month.

ICICI Bank, going forward, could further revise rates depending on the market condition and competition.

Decision on interest rates would depend on how competitors behave. "You have to take all this into account before you do any rate adjustment," ICICI Bank CEO and Managing Director K V Kamath had said last week.

"We will see as we go along. We are all working in a market place. We have to understand market. For that we need next few days..." he added.

Last week, the Reserve Bank (RBI) hiked Cash Reserve Ratio, the amount of depositors' money that banks need to park with it, by half a per cent to tighten money supply.

The hike, which would take CRR to 8 per cent, will impound Rs 18,500 crore from the banking system leading to reduction in the margins of the banks.

first published:April 22, 2008, 03:29 IST