Personal loan lender, Allahabad Bank has hiked its Benchmark Prime Lending Rate (BPLR) by 50 bps. The present BPLR of the bank is 12.50%.
This has been due to RBI hiking repo as well as reverse repo rates, making raise their loan rates. Besides, it is one more step taken by the banks to introduce the customers to base rate method of lending.
While BPLR has been replaced by the base rate method of lending from July 2010, it is still applicable to the older loans and those which are up for renewal. New loans fall under base rate system, and those availing of the BPLR method have to opt for base rate. Though banks had asked RBI to do away with BPLR, but RBI did not accept it.
In a filing to BSE, Allahabad Bank said, “The bank has decided to increase its BPLR by 50 basis points to 12.50 per cent with effect from August 16”.
Many other banks have already increased their lending rates. These are Punjab National Bank, Bank of Baroda, Union Bank of India, Corporation Bank, UCO Bank and IDBI Bank.