Following the RBI’s hike in repo rate and CRR, the banks have reacted accordingly by hiking their lending and deposit rates. Major Banks like SBI, ICICI and HDFC have taken steps which would make all types of loans, home, auto and other retail loans more expensive for the Indian consumer. These banks have hiked their lending rates upto the tune of 0.75 percent more. This move was, however, expected, as the RBI’s intention was to...

In what should be a very bad news for the public sector banks, there has been a realization that their non performing assets (NPA) have increased by about one-fourth of its value three years ago. Non Performing Asset (NPA) means an asset or account of borrower, which has been classified by a bank or financial institution as sub-standard, doubtful or loss asset, in accordance with the directions or guidelines relating to asset classification issued by...

As was expected of many banks, the second largest public lender, Punjab National Bank (PNB) and the Bank of Baroda (BoB) have followed the lead of SBI and UBI in hiking their Benchmark Prime Lending Rate (BPLR). BPLR is the interest rate that commercial banks charge their most credit-worthy customers.

Last week, SBI and UBI had responded to the hike in key rates proposed by the RBI, by hiking their BPLRs by 0.50% (50 basis...

As was being speculated since Tuesday, banks have decided to hike their lending and deposit rates. Among the first banks to decide on the increase, the country’s largest lender, State Bank of India (SBI), and Union Bank are the prominent ones. They along with several other PSU banks have decided to raise lending rates by 50 basis points(0.50%). This news follows the hike in repo rate and cash reserve ratio, announced by the RBI on...

Economists at Standard Chartered Bank feel that the inflation affecting the economy so drastically would stay for more time, and to counter that the central bank would increase its key overnight rates as well as reserve requirement. Standard Chartered Bank said in a note that this step would be taken to curtail inflation which is running at 13-year highs, in the fiscal year 2008-09.

India has seen a inflation rate not seen in the last...

Close on the heels of the decision taken by Jammu and Kashmir Bank, the Housing Development Finance Corporation Limited (HDFC) Bank has followed suit and has increased its benchmark prime lending rate (BPLR) by 0.25 per cent. Prime lending rate (PLR) is the interest rate that commercial banks charge their most credit-worthy customers. The new PLR is 15.25 per cent.

On 19th June, J&K Bank had increased its PLR by 1 percent from 13 to...

India’s second largest bank, ICICI Bank, has followed the lead of the largest public lender, State bank of India in deciding not to increase the interest rates. However, the bank said that this decision is in no ways permanent. It will closely monitor interest rate trends and the Reserve Bank of India's steps for managing inflation before making a final call on the interest rates.

Presently, ICICI Bank's benchmark prime lending rate is among the...

The repercussions of the repo rate hike are being felt in all the banks across India. The newest bank to make a call on the interest rate modification is Punjab and National Bank (PNB). The public sector lender said it will take a view on revising the interest rates by the end of this month in the wake of hike in the short-term lending rate by quarter percent by the Reserve Bank of India.

"We...

The RBI monthly bulletin has shown a new development in the banking sector. In a development which shows expansion of agriculture credit, the monthly bulletin shows that the number of small loan accounts held with nationalised and cooperatives banks have significantly risen during last few years. According to the bulletin, the share of number of small loan accounts in the agriculture credit sector increased by 17% from 35.5% in 2004 out of the total small...

The affect of the hike in the repo rate on the various policies of banks is taking shape. After various banks had increased their lending and deposit rates, the Jammu and Kashmir Bank become the first bank to raise its prime lending rate (PLR). The bank has increased the rate from 13 per cent to 14 per cent following the announcement made by the Reserve Bank of India on Wednesday to increase the repo rate...

In response to the hike in the repo rate by the Reserve Bank of India last week, Vijaya Bank today raised the interest rates on deposits offered with ‘one to less than two years’ maturity by 30 basis points from 8.50% to 8.80%. The new interest rates would be effective from Wednesday.

The bank has said in a statement that the revision is with a view to narrowing liquidity gaps under a specific maturity slab. "Our...

The Housing and Development Finance Corporation Limited (HDFC) today inaugurated a branch in the south Kashmir district of Islamabad. This branch is the first in the district and sixth in J&K and is a part of the growing network of HDFC branches across the Valley.

Speaking on the occasion of the inaugural function of the new branch, S Ramakrishnan, branch banking head, North and East, HDFC Bank, said that after J&K Bank, the HDFC Bank...

The Bank of Baroda is increasing its international presence. The bank which already enjoys a prominence in 25 countries with 71 offices is planning to expand its overseas presence by opening up 10 more offices and branches during the current fiscal year. The bank is targeting the Gulf countries, Australia and China for expanding its overseas network.

Of the 71 branches, 46 are its own branches, 21 are the branches of its eight subsidiaries and four...

With the RBI increasing the repo rate, it is known that the interest rates to be charged by banks will increase. The debate has now shifted to the timing of that hike by the banks. This hike of the repo rate is supposed to affect all type of loans, from personal to home to even car loans. This is why the whole country’s attention has been fixed on the decisions to be taken by...

In a considerable shift in their strategy, the ICICI Bank Ltd has decided to go slow on its retail assets expansion after three years of accelerated growth in the segment.

As a result of this new development, consumer loans, mortgages and auto loans, which jointly accounted for about 69% of ICICI’s total loan book two years ago, have now come down to 58%, and are set to decrease even further.

The shift stems from the...

In a great new development, it was learnt that as many as 12,51,000 students have benefited from the UPA's educational loan through banks. The banks have disbursed Rs 12,000 crore since the scheme was launched, Union Finance Minister P Chidambaram said.

"Students could apply online for the educational loan and although this facility was currently available with only eight banks, all banks would introduce the system by the end of this year," he said.

Impressed...

Taking a step in the right direction, the Union Finance minister P Chidamabaram has asked banks to expedite implementation of the farm loan waiver package and complete the scheme by June 30. This step is important at the moment as the plantation of Kharif crop is very near, and Chidambaram hopes to help most of the farmers clear their defaulters’ tag before that.

Speaking at a meeting with bankers at the Reserve Bank of India...

Aiming to reduce the level of bad loans to bare minimum, the Delhi-based Punjab & Sind Bank has put its big-ticket bad loans on block. According to the tender issued by the bank, 73 loan accounts with outstanding dues of over Rs 3,800 crore are to be auctioned.

The bank has opened its books for due diligence while the bidding is scheduled on June 16.

However, this is not the first time that the P&S Bank has...

The Reserve Bank of India, in a new directive to all banks, has allowed the banks to lend more money to state-owned oil companies. This new development comes in the light of many companies finding themselves cash-strapped because of surging crude prices and their inability to pass on the burden to consumers.

The banks, as directed by the RBI, can lend up to 25% of their capital funds to oil companies as against 20% earlier. This...

Six years after the Reseve Bank of India’s initiative to set up a forum for banks- Corporate Debt Restructuring (CDR), the forum has survived a shut down scare. The forum was set up by banks to resolve bad loans. At a meeting of CEOs of large commercial banks held early this week, bank CEOs decided to shoot down the proposal to wind up the Corporate Debt Restructuring (CDR) forum. Recently, the CDR cell had sought...