HDFC Bank base rate at 7.25 pc; ICICI 7.5 pc
Mumbai, June 30
Several banks today fixed their minimum lending or base rate at as high as 8.5 per cent, even as major players, including HDFC Bank and Citi Bank, pegged their rates below 7.5 per cent announced by SBI and ICICI Bank.
"ICICI Bank base rate (I-Base) is fixed at 7.5 per cent, effective July 1," the lender said in a late night statement. The lowest rate of 7 per cent came from some small private banks -- Dhanalakshmi Bank and DBS Bank -- followed by HDCF Bank and Citi Bank at 7.25 per cent each. Another private sector lender Axis Bank pegged its base rate at 7.5 per cent.
Base rate is the new interest regime that will be introduced from tomorrow as per the Reserve Bank directive for ensuring transparency in lending system and guarding against cheaper credit to lucrative corporate sector at the cost of other borrowers. Among the major lenders, Bank of Baroda, Oriental Bank of Commerce, UCO Bank, Allahabad Bank, Bank of India, Indian Bank and IDBI Bank have set their rate at 8 per cent. Syndicate Bank, Dena Bank, Vijaya Bank and Indian Overseas Bank have fixed the base rate at 8.25 per cent. Tamil Nadu-based private sector lender Karur Vysya Bank's rate is the highest so far at 8.5 per cent.
Mangalore-based Corporation Bank, State Bank of Mysore, State Bank of Bikaner and Jaipur and Federal Bank pegged the rate at 7.75 per cent. Under the base rate lending mechanism, borrowers will be charged interest rates over the base rate depending on their credit profile.
The system, however, will not apply to concessional loans for agriculture, export and other specified sectors. The base rate system will be applicable for all new loans and also existing loans that come up for renewal. Existing loans based on the benchmark PLR system may continue till maturity of the existing contract. However, existing borrowers have the option to switch over to the base rate system before the renewal or expiry of the existing contract without any charges. — PTI