Private sector Laxmi Vilas Bank (LVB) on Friday increased its minimum rate of lending by 0.25 per cent to 11.25 per cent.
With this, LVB has joined its larger peers in increasing the base rate. The Tamil Nadu-headquartered lender said the new rate will be effective August 26.
The bank also upped its deposit rates by up to 2.75 per cent, especially in the short maturities.
The bank increased its deposit rate offering on the 15 -29 days bracket to 6 per cent from the earlier 3.25 per cent, while in the 30 to 45 days bracket, it has been upped to 6.50 per cent from 3.75 per cent, it said.
Generally, deposit rate hikes are seen as a precursor to lending rate increases. Even though many state-run banks have raised their deposit rates, the move has not translated into increase in lending rate for lenders barring Andhra Bank, which hiked it by 0.25 per cent.
Country's top three private lenders ICICI Bank, HDFC Bank and Axis Bank and also mortgage lender HDFC had hiked base rates after the RBI's liquidity tightening moves carried out last month to support rupee.
To arrest the fall of the rupee, which has been routinely hitting new lows against the dollar, the RBI introduced a series of measures since July 15.
The measures have increased the money market rates, especially on the short end, which is now having an impact on the deposit and lending rates of lenders. PTI AA BEN RSY NS 08231938