Bringing cheer to those with fixed deposits but gloom to borrowers, HDFC Bank has hiked both its deposit and lending rates. The bank has hiked FD rates by up to 100 basis points or 1 per cent with effect from today.
At the same time, the leading private sector bank has decided to hike lending rates by up to 75 basis points. This implies that existing and new customers of auto and personal loans will need to shell out more. Corporate loans will also become more expensive. However, home loan customers won't be affected since they are tied to lending rates of HDFC which were last revised on 1 March.
Over the past one year, the rising rate of inflation has compelled banks to hike rates by about 500 basis points in some cases. Top bankers say that by all indications, interest rates have not peaked yet. The RBI policy review scheduled for this week could see another round of hike in key rates, putting pressure on banks to go increase rates further.
According to the hiked FD rates, HDFC Bank will pay 9.25 per cent annual rate of interest for FDs of two years 16 days to regular customers, while senior citizens will earn 50 basis points more, i.e. 9.75 per cent For every tenure, senior citizens will earn 50 basis points more than regular depositors. The steepest hike in rates will be in the shorter tenure of 46-90 days, where the new rate will be 5 per cent, up from 4 per cent earlier.
HDFC Bank has also decided to hike its base rate by 50 basis points to 8.70 per cent per annum, while its new prime lending rate (PLR) will be 17.25 per cent, up from 16.50 per cent earlier.
Surprisingly, HDFC Bank is hiking its base rate within a month of its last hike. On 24 February, the bank had hiked its base rate from 8 per cent to 8.20 per cent. However, the hike in bank's PLR is coming after about three months. The last time it had hiked its PLR was on 10 December.