Many commercial banks have revised their base rates owing to the rising costs of borrowings. These banks include names like Punjab National Bank, IDBI Bank, Allahabad Bank and Axis Bank.
Some banks like State Bank of India, Punjab National Bank and IDBI Bank have also raised their deposit rates following the recent hike in policy rates by Reserve Bank of India.
According to SS Ranjan, CFO, State Bank of India, the bank has no intentions of raising base rate till mid November. "While the cost of deposits has gone up we can absorb the cost for some more time."
MV Nair, CMD, Union Bank of India said, "We will review our base rate towards the end of October based on our funding cost."
PNB, IDBI Bank and Allahabad Bank have raised their base rates by 50 basis points to 8.5%. Axis Bank has raised base rate by 25 basis points to 7.75%.
Base rate hike is however not expected to bring major impact on the existing borrower base of these banks as most of them have loans associated with BPLR.