Today ICICI Bank, the country's largest private sector lender, has increased its base rate or minimum lending rate by 25 basis points to 10%. The rate hike is effective from August 23, 2013.
The rate revision will make all loans and advances offered by the bank on floating interest rate from July, 2010 expensive. The bank had decided to determine the interest rates on new loans and advances, including consumer loans, with reference to its base rate with effect from July 1, 2010.
"ICICI Bank has also announced an increase of 0.25% in its benchmark prime lending rate and in its floating reference rate for consumer loans (including home loans) with effect from August 23, 2013. The above benchmark rates are used for determining interest rates on loans and advances sanctioned up to June 30, 2010," the bank said in a statement today.
The bank's fixed rate customers will not be impacted by the revision in lending rates and their contracted rates will remain unchanged.
In the last few weeks, several private sector banks have raised lending rates as their cost of funds turned expensive. HDFC Bank increased its base rate by 20 basis points to 9.8%, Axis Bank by 25 basis points to 10.25%, and YES Bank by 25 basis points to 10.75%.
The private lenders had also raised their deposit rates before lending rate hikes. ICICI Bank had increased its deposit rates by 50-75 basis points, while HDFC Bank had revised it upwards by 100 basis points. Axis Bank and YES Bank had hiked deposit rates by 25-225 basis points.
So far, most government owned banks, including the country's largest lender State Bank of India (SBI), have not revised their lending rates.
While RBI had kept the policy rate unchanged in its first quarter monetary policy review, its liquidity tightening measures in the past few weeks have impacted short-term rates. On July 15, 2013 the central bank capped banks' borrowings under the liquidity adjustment facility (LAF) and increased the marginal standing facility (MSF) rate by 200 basis points to 10.25%.
The measures led to tightness in liquidity. Bankers had predicted if the steps were not rolled back soon short-term deposit rates would rise followed by increase in lending rates.
About ICICI Bank Ltd.
ICICI Bank is India's second-largest bank with total assets of Rs. 4736.47 billion at March 31,2012 and profit after tax Rs. 64.65 billion for the year ended March 31,2012. The Bank has a network of 3121 branches and 10486 ATMs in India,and has a presence in 19 countries, including India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking,life and non-life insurance,venture capital and asset management.
The rate revision will make all loans and advances offered by the bank on floating interest rate from July, 2010 expensive. The bank had decided to determine the interest rates on new loans and advances, including consumer loans, with reference to its base rate with effect from July 1, 2010.
"ICICI Bank has also announced an increase of 0.25% in its benchmark prime lending rate and in its floating reference rate for consumer loans (including home loans) with effect from August 23, 2013. The above benchmark rates are used for determining interest rates on loans and advances sanctioned up to June 30, 2010," the bank said in a statement today.
The bank's fixed rate customers will not be impacted by the revision in lending rates and their contracted rates will remain unchanged.
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| ICICI Bank India |
In the last few weeks, several private sector banks have raised lending rates as their cost of funds turned expensive. HDFC Bank increased its base rate by 20 basis points to 9.8%, Axis Bank by 25 basis points to 10.25%, and YES Bank by 25 basis points to 10.75%.
The private lenders had also raised their deposit rates before lending rate hikes. ICICI Bank had increased its deposit rates by 50-75 basis points, while HDFC Bank had revised it upwards by 100 basis points. Axis Bank and YES Bank had hiked deposit rates by 25-225 basis points.
So far, most government owned banks, including the country's largest lender State Bank of India (SBI), have not revised their lending rates.
While RBI had kept the policy rate unchanged in its first quarter monetary policy review, its liquidity tightening measures in the past few weeks have impacted short-term rates. On July 15, 2013 the central bank capped banks' borrowings under the liquidity adjustment facility (LAF) and increased the marginal standing facility (MSF) rate by 200 basis points to 10.25%.
The measures led to tightness in liquidity. Bankers had predicted if the steps were not rolled back soon short-term deposit rates would rise followed by increase in lending rates.
About ICICI Bank Ltd.
ICICI Bank is India's second-largest bank with total assets of Rs. 4736.47 billion at March 31,2012 and profit after tax Rs. 64.65 billion for the year ended March 31,2012. The Bank has a network of 3121 branches and 10486 ATMs in India,and has a presence in 19 countries, including India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking,life and non-life insurance,venture capital and asset management.
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