Mumbai: Borrowers haven't heard the last of interest rate hikes, as more banks are preparing to raise lending rates in the days ahead to offset increase in their cost of funds.
With leading lenders like State Bank of India, Punjab National Bank and Bank of Baroda having already pushed up their Prime Lending Rate (PLR) by 0.25-0.5 per cent, others including Union Bank of India, Dena Bank, Bank of Maharashtra and Yes Bank are considering revising their PLR or select lending rates.
Union Bank of India Chairman and Managing Director M V Nair informed PTI here today that his bank plans to take a call on the matter by this weekend.
The bank will revisit its PLR, along with home and other retail loans by this weekend. However, deposit rates are unlikely to be revised immediately, he said.
New-age private sector banking major Yes Bank's Managing Director and CEO Rana Kapoor told PTI that his bank will not up its PLR for the time being. It presently stands at 12.5 per cent. Similarly, it will also not increase its deposit rates.
"We will, however, continue to monitor the situation and review our rates at our next Asset-Liability Management Committee (ALCO) meeting scheduled for next week," he said.
Standard Chartered Bank too is likely to increase rates on its consumer loans, said a top official of the bank.
Bank of Maharashtra will review its PLR, loan and deposit rates tomorrow. "There is a possibility of us hiking our home loan rates," its Chairman M D Mallya said.
Home loan leader HDFC has already hiked its rates.
Another public sector banking major Dena Bank is also likely to take a decision on its PLR and loan rates within the next couple of days.
Foreign banks have not increased their PLRs as yet but German powerhouse Deutsche Bank is likely to increase its deposits rates very soon, according to indications available.
Even as several players increased lending rates to offset rising cost of funds, some others have upped deposit rates to mobilise more deposits - a cheaper source of funds for banks.
Private sector banks such as IndusInd Bank and Bank of Rajasthan have left their PLRs untouched but increased their deposit rates. IndusInd Bank has increased deposit rates for a tenure of 270 days to less than one year from 6.75 per cent to eight per cent.
Similarly, Centurion Bank of Punjab (CBoP) too has increased its deposit rates on specific tenures. It has, however, also increased rates for two-wheeler loans, in which space it is a major player.
The hike in rates follows Reserve Bank's decision last month to increase key short term rates (repo and reverse repo) by 0.25 per cent with a view to manage inflation.