With this hike, borrowers will have to pay higher EMIs and the tenure of their home and auto loans could also be extended. A large number of borrowers will be impacted by the hike as both the banks together enjoy over 30% market share
Mumbai: India's top two lenders State Bank of India (SBI) and ICICI Bank on Thursday announced a hike in lending rates by 50 basis points (bps) each, making their home, auto and corporate loans dearer, reports PTI.
With this hike, borrowers will have to pay higher equated monthly instalments (EMIs) and the tenure of their home and auto loans could also be extended.
A large number of borrowers will be impacted by the hike as both the banks together enjoy over 30% market share.
Both SBI and ICICI have increased the base rate, or the minimum lending rate, to 10% from the existing 9.50%, they said in separate statements.
SBI said its asset-liability committee, which met here yesterday, also decided to hike rates on loans under the old BPLR (benchmark prime lending rate) system by a similar 50 bps to 14.75%, making loans for existing borrowers dearer by at least 50 basis points.
ICICI Bank, too, announced an increase of 50 bps in its benchmark prime lending rate and in its floating reference rate for consumer loans (including home loans).
The revised rates of both lenders would be effective from 13th August.
Following the Reserve Bank of India’s (RBI) decision to raise short-term key rates in its first quarter review of monetary policy last month, lenders have responded by increasing interest rates.
Major lenders including SBI, Punjab National Bank, Bank of Baroda and Oriental Bank of Commerce have raised interest rates.
In the major bank category, HDFC Bank is the only bank which has not so far raised rates following 26th July policy rate hike.
ICICI Bank said, the fixed rate customers will not be impacted by the rate hike and their contracted rates will remain unchanged.
Meanwhile, SBI increased its deposit rates in the 180-240 days basket to 7% per annum as against 6.50% earlier, the statement said.
However, interest rates on other fixed deposits have been left unchanged.
SBI has raised its lending rate by as much as 2.40% during the year. The base rate was raised to 8% from 7.40% in January this year.
The rate hike announcement came within hours of bank chairman Pratip Chaudhuri hinting at a hike.
“The RBI has increased the policy rates by 0.5%...So I think we will have to transmit these rates both for our depositors as well for our borrowers,” Mr Chaudhuri told reporters earlier in the day.
The RBI had hiked its key short-term lending rates by a higher-than-expected 50 bps on 26th July to tame the uncomfortably high inflation number, which stood at 9.44% in June.
This was the 11th hike by the central bank since March 2010, when it switched over from the monetary policy loosening stance adopted during the financial slowdown to one for curbing inflation.
Following the RBI hike, almost all major banks have hiked their base rates in the range of 25-100 bps. Though music to the ears of policymakers at the Mint Road, borrowers are a harried lot as loan servicing has become dearer.
The Anil Ambani-promoted Reliance Infra, having a consumer base of over 27 lakh, currently holds distribution licence in the suburbs which is due to expire on 15th August
Mumbai: The Maharashtra Electricity Regulatory Commission (MERC) on Thursday granted Reliance Infrastructure (Reliance Infra) the license to transmit and distribute power in suburban Mumbai for the next 25 years, reports PTI.
The Anil Ambani-promoted Reliance Infra, having a consumer base of over 27 lakh, currently holds distribution licence in the suburbs which is due to expire on 15th August.
In view of this expiry, MERC had invited bids from utilities for distribution in this region.
Lanco, Indiabulls, Torrent Power, Maharashtra State Electricity Distribution Company and Reliance Infra had submitted bids.
After considering the suggestions and objections by the bidders and other stakeholders, the commission on Thursday granted Reliance Infra the licence to distribute electricity in the suburbs.
“The commission is of the view that it is in the public interest to grant licence to Reliance Infra to distribute electricity in the proposed area of supply. The commission grants distribution licence to Reliance Infra to supply electricity in the proposed area of supply for 25 years from 16th August,” MERC said in its order.
Bombay Suburban Electricity Supply or BSES, which was renamed as Reliance Energy and subsequently renamed again as Reliance Infrastructure, had received the licence to distribute power in the region in 1926, which was due to expire on 15 August 2011.
MERC has also granted license to transmit power in the region.
This transmission licence is granted to Reliance Infra for evacuation of power from generating units at Dahanu and extended transmission system for interconnecting various load centres in suburbs in and around Mumbai, the commission said.