Continuing with the hikes in the lending and deposit rates, private-sector lender Development Credit Bank (DCB) today increased its benchmark prime lending rate by 75 basis points (100 basis points = 1 percent). DCB officials said that following tight monetary policy of the Reserve bank of India, the bank has decided to hike its BPLR by 0.75 percent.
A bank spokesman said that compared with the earlier 14.5 percent, DCB's prime lending rate now stands at 15.25 percent.
In addition to this, the bank has revised interest rates on Resident and Non-resident Ordinary (NRO) deposits across various maturities. These new changes have come into effect from July 8, he added.
Nevertheless, the bank has also introduced a new deposit scheme, having a maturity of 149 days, which will attract an interest rate of 8.75 per cent.
The spokesman said that this was the highest return offered by any bank in this particular tenure. There will be additional benefits for senior citizens, who would be eligible for an additional 0.5 per cent interest.
The country’s banking governing body, the Reserve Bank of India, had hiked the repo rate and the cash reserve ratio by 50 basis points each on the 24th of June. The reason for this dual hike by the RBI lies in the present scenario that the country finds itself in. India is in the midst of a severe inflation crisis, one the country hasn’t seen in over a decade. Inflation stands at 11.63 percent and might go up. The apex bank, by this monetary tightening is trying to curb the demand of the customers by reducing the amount of money being circulated in the economy.