IDBI Bank ups base rate,BPLR by 0.5 per cent

IDBI Bank has become the first bank to revise its lending rates after the RBI today hiked its repo rate by 0.50 per cent to 7.25 per cent.

The bank has also hiked interest rates on different maturities of its deposits. For deposits under Rs 15-lakh in the 270-days to 1 year bucket,IDBI has hiked the rates by 50 bps to 8.50 per cent,while 6 months to 269 days tenor deposits will earn an interest of 8.15 per cent,up 40 bps.

“The RBI is certainly concerned about containing inflation,that is hovering around 8 per cent currently,and want to bring it down to 6 per cent. However,the move will also definitely impact the margins of the banks. Hence we have increased our interest rates by half a per cent,” IDBI’s Executive Director,R K Bansal,told PTI here.

On the impact on credit growth of IDBI,Bansal said that the bank would not be much affected adding that the bank expects a credit growth of 15-18 per cent this year.

The auto and home loans for IDBI which mainly concentrates on corporate lending,forms a minimal portfolio with auto contributing about 2 per cent and home loans at 25 per cent of its overall lending.

While corporate lending was pegged at Rs 1-lakh-crore,housing loans were around Rs 25,000-crore.

Bansal further said that IDBI expects its CASA to grow by 20 per cent at Rs 33,000-crore,while the overall deposits will grow by 55-60 per cent.