Public sector lender Canara Bank has announced a rise in benchmark prime lending rate (BPLR) as well as base rate by as much as 25 bps. Following the policy rate hike by Reserve Bank of India on June 16, Canara Bank became the first lender to hike lending rates.
The base rate of the bank would now stand at 10.25% while BPLR would be fixed at 14.5%.
The revised rates would come into effect from July 01, 2011.
"The upward revision in base rate was required, since cost pressures were increasing. This resulted from an increase in cost of deposits. Moreover, it also improves the transmission of RBI policy action," said Chairman and Managing Director S Raman.
Other banks are also having their stand regarding the interest rate hike. "There is a pressure on margins because of an increase in deposit rates and the savings bank interest rate. But we will wait for two-three weeks before taking a decision on revising the base rate, as we had increased the lending rates in May," said Murali Natrajan, managing director and chief executive officer, Development Credit Bank.
"As of now, I cannot say whether there would be a base rate rise or not. We would take a decision in the asset-liability committee meet scheduled next week," said Chairman and Managing Director of Bank of Maharashtra, Mr.A S Bhattacharya.