Public sector lender, Indian Bank has announced a hike in its benchmark prime lending rates (BPLR) by 25 basis points. The revised rates have come into effect from January 21, 2011.

With the revision, the BPLR now stands at 13.50% as against 13.25% earlier. BPLR refers to the interest charged by banks to its prime customers. Prime customers are defined on the basis of their credit worthiness.

With effect from July 1, 2010, the Reserve Bank of India replaced BPLR system of lending with base rate system. Under base rate system, lending below base rate has been stopped thereby proving it to be a step towards removing discrimination amongst customers.

The monetary policy review coming up on January 25 is expected to bring another rise in policy rates to curb inflation.