Kotak Mahindra Bank has become the latest lender to push up the base rates following the RBI’s recent liquidity tightening measures to curb the fall in rupee. Kotak Mahindra Bank raised base rate to 10% from 9.75% with immediate effect. The bank has also revised benchmark prime lending rate (BPLR) by 25 basis points, it said in a notice to the Bombay Stock Exchange on Monday.
Earlier, HDFC Bank had raised its base rate by 20 basis points to 9.8%, with effect from August 3. Yes Bank, too, had upped base rate by 25 bps to 10.75% on July 31 in response to higher cost of deposits.
While private lenders are going slow on pushing up their base rates, State Bank of India says it has no plans to raise rates yet since it is sitting on surplus liquidity of R60,000-70,000 crore.
“We are not looking at any base rate hikes,” confirmed Pratip Chaudhuri, SBI chairman on the sidelines of the bank’s first quarter earnings press conference.
In July, public sector lenders Oriental Bank of Commerce (OBC) and Punjab & Sindh Bank (PSB) had both announced lending rate cuts between 25-26 bps, however they had to rollback their decisions after RBI announced the liquidity control measures. Both these banks are yet to take a call on whether they will raise base rates or not.
Even in case of non-banking finance companies (NBFCs), the increased cost of funds have had similar impact. Commercial vehicle financier, Shriram Transport raised lending rates on all fresh loans by 25-50 bps, across categories, starting from August 1.
