After the raise by RBI in its policy rate, private lender Kotak Mahindra Bank announced a raise of 50 basis points on its base rate and benchmark prime lending rate.
The raise in the lending rates, that would be effective from May 10 have increased the base rate of the bank from 8.756% to 9.25%. Announcing the raise, in a statement to the stock exchange, the bank also clarified that the bank is all set to charge the hike on all categories of loans, except for those that are exempted by RBI.
Prior to Kotak Mahindra, India"s second largest lender, ICICI also declared a raise benchmark base rate by 50 bps to 9.25% last week. The inflation in the base rates of the bank initiated after, RBI raised its repo and reverse rate by 50 basis points. The raise in the BLPR of the banks would now impose a hike on the existing loan borrower too.
The rate increase is calculated to be 9 per cent to 7 per cent, on a fixed deposit of 5 years. However, 7.25 and 6.25 basis points turn out to be the revised repo rate and reverse repo rate respectively.