The bank has revised the base rate upwards from 9.75 percent to 10 percent with effect from August 13, Kotak Mahindra Bank said in a statement. (Agencies)
"All categories of loans (other than exceptions permitted by RBI) will henceforth be priced with reference to the revised base rate," said the private sector bank. It has also revised its Benchmark Prime Lending Rate (BPLR) upwards by 0.25 percent.
Earlier this month, the country’s second largest private sector lender HDFC Bank had raised to 9.80 percent from 9.60 percent.
Cost of funds has gone up for banks as the Reserve Bank has taken a series of steps to check the fall of rupee against the US dollar.
Weighed down by a weak rupee, the RBI chose to keep the repo rate or the rate at which it lends to the system, at 7.25 percent. It kept the cash reserve ratio, the amount of deposits banks park with RBI, unchanged at 4 percent.
Last week, the rupee had hit an intra-day record low of 61.80 against the dollar. The decline of the rupee to previous record low of 61.21 against the dollar on July 8 forced the RBI to take steps to curtail liquidity and curb speculation.
On July 15, the Reserve Bank put in place measures to restore stability in the foreign exchange market, including raising the Marginal Standing Facility and bank rates to 10.25 percent and restricting access by way of repo window to Rs 75,000 crore.
The bank has revised the base rate upwards from 9.75 percent to 10 percent with effect from August 13, Kotak Mahindra Bank said in a statement.