IDBI Bank and Development Credit Bank raise lending rates

Public sector lender IDBI Bank today increased its minimum rate of lending or the base rate by 0.5% to 9.50% and benchmark prime lending rate (BPLR) by 0.25% to 14%, a release issued by the bank said.Private sector lender Development Credit Bank has also announced an upward revision in base rate to 9% from 8.5% and the BPLR by 50 basis points to 16.25%, according to a press release.The base rate system replaced the BPLR last July to make lending more transparent. Some older loans given under the BPLR are yet to migrate on to the base rate system.IDBI Bank's move follows others like Dena Bank, Bank of India, Union Bank of India, Indian Overseas Bank, Syndicate Bank which have also upped their base rate following the Reserve Bank's January 25 announcement to hike its key rates- the repo at which it lends and the reverse repo at which it collects extra cash, by 0.25% each.The lending rate hikes were prompted by increase in cost of funds, where deposit rates have been increased up to 125 basis points, and keeping in view the market conditions, IDBI Bank said.Meanwhile, IDBI Bank has also increased its interest offering for term deposits by up to 1.25% depending on maturities. Under the revised rate structure, a 15-45-day deposit up to Rs1 crore will fetch an interest of 4.50% per annum, up from earlier 3.25%, the bank statement said.