TOUGH CALL

Calcutta, June 30: Allahabad Bank today announced a 0.5 percentage point hike in its benchmark prime lending rate (PLR) to 13.50 per cent with effect from July 1. The city-based public sector bank had reduced its PLR to 13 per cent from 13.25 per cent in March this year.

Following the rate hike, all loans linked to its PLR will become costlier by 0.50 percentage points.

Allahabad Bank’s home loan rates, now varying between 9.25 per cent and 11 per cent on a floating rate basis, will become 9.75 per cent and 11.50 per cent beginning next month. At present, the bank offers car loans at a floating interest rate of 12 per cent. This will become 12.50 per cent.

The bank has also raised its term deposit rates for various tenures by 0.50 percentage points. The maximum interest rate on term deposits will be 9.5 per cent for a period of one to three years. Deposits up to five years will attract an interest rate of 9 per cent. Senior citizens will get an interest at the rate of 10 per cent for deposits between one and three years.

Allahabad Bank follows a slew of public sector lenders — the State Bank of India, Union Bank of India, Punjab National Bank, Bank of Baroda and Canara Bank — that upped their PLRs by 0.50 percentage points each last week.

Allahabad’s PLR at 13.50 per cent will be the highest among public sector banks that have announced a rate hike so far. The SBI’s new PLR stands at 12.75 per cent, while PNB’s is at 13 per cent. Union Bank, Bank of Baroda and Canara Bank have raised their PLRs to 13.25 per cent.

Dena follows suit

Dena Bank today decided to increase its benchmark prime lending rate by 0.5 per cent to 13.50 per cent, effective from tomorrow.

The state-run bank has also decided to raise deposit rates by 0.25-0.75 per cent on various maturities effective from July 4. Deposits for maturity of two years and above will have an interest rate of 9 per cent, Dena Bank said in a statement. The bank has increased its interest rates on domestic term deposits by 25-75 basis points for various maturities of 180 days and above, the filing added.