HDFC Bank raises PLR to 16 per cent

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HDFC Bank raises PLR to 16 per cent

Mumbai, July 1:: Leading private sector lender, HDFC Bank, has hiked its prime lending rate (PLR) by 0.75 per cent to 16 per cent.

The bank has also increased its deposit rates by 0.5-1 per cent across various maturities.

While the PLR hike is with immediate effect, the deposit rate hikes will take effect from July 3 onwards, a senior bank official said in Mumbai.

This is the second hike in the bank's PLR in almost a fortnight. It had last hiked its PLR by 0.25 per cent around mid-June.

"We reviewed the situation post the 0.50 per cent hike effected by the Reserve Bank in both the repo and cash reserve ratio (CRR) and decided to hike our PLR and deposit rates in line with prevailing market conditions," HDFC Bank's Deputy Treasurer, Ashish Parthasarathy, said.

The bank has a view that inflation numbers would remain high for the next 3-4-months and with the possibility of further monetary actions by the Reserve Bank, "we decided to raise our PLR," he said.

"Nobody expected global oil prices to flare up as they have done nor did anybody expect inflation to increase to such a high level," he said.

According to Parthasarathy, with inflation numbers high, there was a possibility of further hikes in the repo and CRR in the coming weeks.

Cost of funds for both the bank and the banking sector would definitely increase following the strong monetary action taken by the Reserve Bank, he said.