Effective Thursday, HDFC Bank will raise its base rate by 55 basis points (bps) to 9.25% per annum, a source in the bank said. This also made its lending rate on a par with the other two banking majors, SBI and ICICI Bank. HDFC Bank also raised its prime lending rate (PLR) by 50 bps to 17.75%. Since the introduction of base rates as the benchmark lending rate for the banking industry in July last year, SBI and HDFC Bank, have both raised their rates five times while ICICI Bank has done it four times. From 7.25% on July 1, 2010, HDFC Bank's base rate has gone up by 200 basis points to 9.25% now.

For retail customers, the latest round of hikes by HDFC Bank will make auto, consumer and personal loans expensive, but not home loans because all mortgage loans by the bank are sourced from its parent HDFC, which has not raised its rate yet. The bad news, however, is that the housing finance major is expected to take a decision on its rates either on Thursday or Friday, and going by all indications, it would go for a hike. HDFC Bank also raised FD rates, and the highest hike is in the 46-90 days bracket where it will now offer 6.25% per annum, up 125 bps from 5% earlier. The bank has raised rates for nine different tenures of short terms, and has left rates for FDs of more than one year unchanged, sources said.

Source: [TOI]