Within hours of the Reserve Bank of India (RBI) hiking its repo rate by 0.50%, IDBI Bank has announced
increase in its base rate and benchmark prime lending rate (BPLR).
The bank hiked both its base rate and BPLR by 0.50% each to 10% and 14.50%, respectively, owing to increase in cost of funds.
IDBI Bank has become the first bank to revise its lending rates after the RBI today hiked its repo rate by 0.50% to 7.25%.
The bank has also hiked interest rates on different maturities of its deposits. For deposits under Rs15 lakh in the 270-days to 1 year bucket, IDBI has hiked the rates by 50 bps to 8.50%, while 6 months to 269 days tenor deposits will earn an interest of 8.15%, up 40 bps.
"The RBI is certainly concerned about containing inflation, that is hovering around 8% currently, and want to bring it down to 6%. However, the move will also definitely impact the margins of the banks. Hence we have increased our interest rates by half a per cent," IDBI's Executive Director, R K Bansal, told PTI here.
On the impact on credit growth of IDBI, Bansal said that the bank would not be much affected adding that the bank expects a credit growth of 15-18 per cent this year.
The auto and home loans for IDBI which mainly concentrates on corporate lending, forms a minimal portfolio with auto contributing about 2% and home loans at 25% of its overall lending.
While corporate lending was pegged at Rs1-lakh-crore, housing loans were around Rs25,000 crore.
Bansal further said that IDBI expects its CASA to grow by 20% at Rs33,000 crore, while the overall deposits will grow by 55-60%.
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