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  • ICICI raises deposit, lending rates by up to 50 basis points

    Published on February 23, 2011

    The country’s largest private sector lender, ICICI Bank, on Wednesday hiked its deposit and lending rates by up to 50 basis points.

    The bank has decided to raise interest rates on fixed deposits of various tenors by 0.25-0.50 per cent, ICICI Bank said in a statement.

    Besides, it raised base rate or the minimum lending rate by 50 basis points to 8.75 per cent.

    With effect from 1st July, 2010, interest rate on new loans and advances, including consumer loans, is determined with reference to ICICI Bank Base Rate.

    The base rate is currently at 8.25 per cent.

    The Bank has decided to increase benchmark prime-lending rate and its Floating Reference Rate (FRR) for consumer loans (including home loans) by 50 basis points.

    The new rates would be effective from Thursday, the statement said.

    The benchmark rates are used for determining interest rates on loans and advances sanctioned up to 30th June, 2010, it said.

    The customers who have borrowed at fixed rates will not be impacted by the above increase and their contracted rates will remain unchanged, it said.

    While the higher deposit rates would provide better returns to savers, rise in lending rate would increase the EMIs for auto and home loan borrowers.

    Besides, corporate loans too would become expensive.

    The announcement by ICICI Bank follows similar hike effected by many banks, including SBI, during the month.

    Banks have raised interest rates following a 0.25 percentage point hike in short-term lending and borrowing rates by the Reserve Bank last month.