New Delhi: Country's second largest public sector lender Punjab National Bank (PNB) announced a possible hike in its Prime Lending Rate in the range of 25 to 50 basis points on Tuesday.
Most private banks including the ICICI and HDFC have already hiked their lending rates. With public sector banks too giving in to RBI pressure, liquidity seems to be on its way out from the markets.
"We have not taken any decision but there could be a case for hike in PLR by 25 to 50 basis points," PNB Chairman and Managing Director S C Gupta wad quoted by PTI.
The decision about rate hike would be taken after reviewing market situation, he said adding the ALCO (Asset Liability Committee) of the bank will take a call in a week.
Currently, the PLR of the bank stands at 12.25 per cent which was last raised in February.
While the bank has raised interest rates on consumer loans, home loans have been left untouched for some time.
As RBI tightened money supply to tame high inflation by hiking its short-term lending (repo) rate (by 0.25 per cent) and raising cash reserve ratio (CRR) (by 0.50 per cent) to suck out about Rs 19,500 crore from the system, cost of funds for banks has been pushed up.
With inputs from PTI
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