Mumbai: Public sector lender IDBI Bank today hiked interest rates for select category of educational loans along with retail term deposit rates by up to 50 basis points, but has left the base rate unchanged.
“We have not hiked the base rate for now… the demand for credit is slow and we have also decided to look at the liquidity conditions,” IDBI Executive Director and Chief Financial Officer R K Bansal, said after a meeting of its ALCO (asset-liability committee) here.
Although, it was expected that banks would pass on the extra burden to the borrowers after the Reserve Bank increased its key policy rates, for the 10th time, in its mid-quarter policy review by 25 basis points on June 16, no bank has so far has gone ahead with the move as credit offtake is weak.
IDBI Bank had also hinted that it might hike its lending rates on the policy review day. However, it has opted to reprice its assets on the education side.
The city-based lender has decided to increase the lending rate by 25 basis points on education loans of between Rs 7.5 lakh and Rs 20 lakh, while for loans up to Rs 7.5 lakh, the rates have been cut by 25-50 bps.
“The re-jigging in educational loans is to align ourselves with the market and will also help us achieve priority sector lending targets,” Bansal said.
On the deposit rates side, the bank said, deposits under Rs 15 lakh in the 270-365 days maturity will now yield 9 per cent, up 50 bps.