Public sector and foreign banks are expected to follow suit in a weeks time.
IndusInd Bank has increased its lending rates across different products by 25-75 basis points. However, the benchmark prime lending rate (BPLR) has been kept unchanged. Centurion Bank of Punjab has also increased the rates for two-wheeler loans by 50 bps.
Both the banks have also revised the rates on deposits too. IndusInd Bank has started offering 8% return on deposits for a period of 270 days.
There is no lack of liquidity in the system, said Bhaskar Ghose, managing director, IndusInd Bank. However, we do not want to get into the mad rush of mobilising deposits at the end of the year. Hence, we are offering such higher rates only for a one time bucket.
Also, Centurion Bank of Punjab has raised its interest rates by 35 basis points on Friday for deposits ranging from 91 days and up to 180 days and 181 days and up to 364 days.
Public sector banks are also planning to join the bandwagon of hiking lending rates and deposit rates. State Bank of India (SBI) is planning to take a decision on a rate hike in August. OP Bhatt, chairman, SBI said, We may go for graded hikes and the (asset-liability) committee will decide in which segment to effect the hike and what to exclude. The bank will consider hiking both deposit and lending rates.
Bank of Baroda and Bank of India are also planning to hike both the BPLR and the deposit rates in the first week of August.