Mumbai, Oct. 25: Yes Bank today raised lending rates by 25 basis points in response to a hike in the repo rate, while its larger peers signalled they were not in a hurry to raise interest rates on loans for their retail and corporate borrowers.

The mid-sized private sector bank raised its base rate by 25 basis points to 10.5 per cent, effective today. Yes Bank also increased its prime lending rate by a similar margin.

However, many of the other banks, particularly the larger ones, said lending rates were unlikely to go up at least for now.

Speaking to reporters today, Pratip Chaudhuri, chairman of the State Bank of India (SBI), said as an increase in banks’ base rate depended on the deposit rate and given the comfortable liquidity situation now, higher deposit rates were not in the offing now.

“Our compulsion to raise lending rates will happen if deposit rates go up. All banks are now seeing a good inflow of retail deposits, liquidity is plentiful and banks continue to have advantage over government saving schemes. Credit demand is also not strong. Banks will not be desperate to raise rates,” he said.

“The rates would not go up immediately. Everybody is going to watch before taking any decision on rate hikes,” Chanda Kochhar, ICICI Bank managing director and chief executive, said.

Aditya Puri, HDFC Bank managing director and chief executive, said, “Lending rates will not go up till the deposit rates do so. At the moment it is a comfortable situation.”