HDFC Bank hikes lending rate by 50 basis points

NEW DELHI: The country's leading housing finance company HDFC on Tuesday hiked retail prime lending rate by 50 basis to 16.50 per cent.

The revised rate is with effect from August 1 and is in line with recent hikes in rates in the economy, Housing Development and Finance Corporation (HDFC) said in a statement.

"HDFC has revised its retail prime lending rate by 50 basis points on its loans with effect from August 1. This is in line with interest rates in the economy, which have hardened due to increase in policy rates by 75 basis points since June 2011," it said.

Under the new rate structure, a new loan borrower will be charged an interest of 10.75 per cent per annum for loans up to Rs 30 lakh, 11 per cent for loans over Rs 30 lakh but under Rs 75 lakh and 11.5 per cent to those above that, a company spokesman said.

On Monday five banks, including Indian Bank, Andhra Bank and Bank of Maharashtra, had raised lending rates by up to 50 basis points.

More than a dozen banks and other lending agencies have revised upwards their lending rates after RBI last week raised the short-term lending (repo) rate by 50 basis points to 8 per cent and the short-term borrowing (reverse repo) rate by a same margin to 7 per cent in a bid to tame inflation.

RBI has hiked its key policy rates 11 times since March 2010 as a means of taming inflation.

Subsequently, the interest rate under the Marginal Standing Facility, an additional borrowing window, has gone up to 9 per cent from the earlier level of 8.5 per cent.