Canara bank joins the hike league

With Yes Bank to be the first one to accept the hike announced by the Reserve Bank of India and raiseits lending rates, Canara bank also announced a 50 basis points increase in its base rate and BenchmarkPrime Lending Rate (BLPR). With the revised rates, that would be effective from August 1, 2011, thebase rate of the bank now stands out to be 10.75 per cent from existing 10.25 per cent, while its BLPRincreases to 15 per cent from 14.50 per cent. Meanwhile, deposit rates have revised within the range of25 basis points to 150 basis points for various maturities.

The hike comes as a result of the 11th hike in the lending, since March 2010, by Reserve bank of India.RBI announced a 50 basis points hike in its policy rates. Banks, therefore, in order to save their marginsare passing on the hike to their customers. Prior Canara Bank, others banks like Yes Bank, ING VysyaBanks have already joined league.

The hike, a measure by RBI to tame inflation, is costing high on the pockets of middle class man. Theincrease has led loans such as auto loan and home loans to become more expensive.

Further, Canara Bank is accompanied by Development Credit Bank, which also announced a 50 basispoints hike in its base rates and BLPR.on