HDFC Bank is the first bank to increase its base lending rate since the RBI hiked its benchmark repo rate by 25 basis points on October 29. The hike in the rate comes on the back of response to the repurchase or repo rate hike last week by the central bank, added the media report.
"We review our base rate every quarter depending on a set formula which includes many components like interest rates in the market and yield on government bonds. After a review last week it was found that rates have to increase and, hence, the change," Ashish Parthasarthy, Treasury Head, HDFC Bank, told media.
However, State Bank of India (SBI) chose to leave its base rate unchanged at 9.8 per cent the lowest in the market , after its asset liability committee (ALCO) met last week after the RBI's policy announcement.