ICICI Bank hikes minimum lending rate by 0.25%

ICICI Bank hikes minimum lending rate by 0.25%Following rival private-sector lenders HDFC Bank and Axix Bank's footsteps, ICICI Bank Ltd. on Thursday announced an increase of 0.25 per cent in the minimum interest rate it charges from borrowers.

ICICI Bank announced that it would start charging borrowers a minimum interest rate of 10 per cent from Friday, August 23, a quarter percentage point up from previous rate of 9.75 per cent.

The increase impact all loans linked to the country's largest non-state lender's base rate. The 0.25 per cent increase will push up borrowers EMIs on a home loan of Rs 10 lakh by Rs 170 per month.

The private-sector lender also announced increases in benchmark prime lending rate as well as its floating reference rate for consumer loans.

Rival lenders HDFC Bank, Axis Bank and Yes bank have already increased their minimum lending rates as funding costs have hiked for banks due to the Reserve Bank of India's (RBI's) liquidity-tightening measures.

The shortage of cash in the banking sector has also forced some of the lenders to increase interest rates on fixed deposits as part of their efforts to attract more funds.