ICICI raises retail lending rates upto 50 bps

February 24, 2007:ICICI Bank, India`s second-largest lender, has raised lending and deposit rates for new retail customers by 50 basis points to help maintain its net interest margins, reports Economic Times.

There is no change in lending rates for corporates and the new rates would be applicable only to new customers, executive director V. Vaidyanathan said.

He expected the increase to help maintain the bank`s net interest margin, which was 2.6% for the December quarter.

Vaidyanathan said a series of rate increases and tightening measures by the central bank were having an impact on the demand for loans. He said annual loan growth could slow to about 20% from the current rates at around 30%.

The interest rate on new variable-rate home loans would be 11%, up from 10.5%, and fixed-rate home loans would rise to 13% from 12.5%. Leading bank, State Bank of India raised its benchmark lending rate by 75 basis points to 12.25%.

Source: Myiris