ICICI Bank,others join rate hike bandwagon

It has also announced an increase of 0.50 per cent in its benchmark prime lending rate and in its Floating Reference Rate for consumer loans (including home loans) with effect from May 7.

These benchmark rates are used for determining interest rates on loans and advances sanctioned up to June 30,2010. The fixed rate customers will not be impacted by the above increase and their contracted rates will remain unchanged, it said.

The hike comes close on the heels of a similar decision by various lenders like Union Bank of India,Andhra Bank,YES Bank,Indian Bank,Punjab National Bank,Oriental Bank of Commerce,Bank of Maharashtra and IDBI Bank to effect a hike in their lending rates.

Public sector lender Union Bank of India raised its base rate by 50 basis points to 10 per cent. Arising out of increasing interest rate scenario,and due to higher benchmark Policy Rates of RBI as well as increasing cost of deposits,Union Bank of India has revised Base Rate by 50 basis points from 9.5 per cent to 10 per cent, the bank said in a filing to the BSE.

The revised rates will be effective from May 7,it added. The bank has also increased its Benchmark Prime Lending Rate from 13.75 per cent to 14.25 per cent with effect from tomorrow. The Base Rate system replaced the BPLR system with effect from July 1,2010.