HDFC Bank revises its BPLR by 50bps

HDFC Bank has again revised its benchmark prime lending rate (BPLR). Lender has raised its BPLR by 50bps to 16.25 percent. The revised rates will be applicable from immediate effect.

Thus all BPLR-linked loans, including vehicle and personal loans, which were taken by the bank customers before July, 1 2010, will rise in respective proportions.

Under BPLR the customers can avail loans at a discounted rate to the BPLR offered by the lender. As per Reserve Bank of India’s directive from July 1, 2010 all the banks have moved to the base rate system and lending loans to the new borrowers on the base rate. HDFC has set its base rate at 7.25%.

A senior bank official said due to rising cost of funds bank has raised its BPLR. Earlier bank had raised term deposit rates across various maturity periods.

The official said, “Deposit rates in the banking system could move up further by 50-75 basis points by the end of the financial year. Depending on credit demand, base rate could also come up for review in October.”

However, in the last one month almost all the banks, including the State Bank of India, Punjab National Bank, ICICI Bank, Union Bank of India and IDBI Bank have increased their BPLRs on an average by 50-75 basis points.

PNB has raised its BPLR to 11.75 per cent from 11 per cent with effect from August 1. Union Bank hiked to 12.25 per cent from 11.75 per cent with effect from August 4. SBI raised its BPLR by 50 basis points to 12.25 per cent with effect from August 17. ICICI Bank increased BPLR by 50 basis points to 16.25 per cent with effect from August 18.

All the banks have also raised their term deposit rates by 25-150 basis points across various maturity periods.

According to financial analysts, bank by rising the BPLR will be try to move the existing loan customers to the base rate. Because banks do not want to be under the burden of administering two benchmark lending rates.