Wednesday, May 14, 2008

Sub-PLR and credit card rates to increase

Soon Banks will be hiking their sub-PLR rates and other retail rates like credit card and auto loans rates. Previously in April RBI in three phases hiked the cash reserve ratio (CRR) by 75 basis points, sucking Rs 27,500 crore from the banking system.

A Mumbai-based chief of a public sector bank said, “Since, we cannot hike our prime lending rates (PLR), since the finance minister has asked us not do so, we will increase the sub- PLR rates which are availed of by the corporate cheaper than the PLR,”

On the other hand the country’s largest credit card player, ICICI Bank has crop up a concept of “tiered pricing”.

Simultaneously, the bank is claiming that it has reduced the rates.

Meanwhile the customers of few foreign banks are receiving their latest credit card statements in which the banks have started informing about the rate hikes.

According to the sources from Citibank, recently it has raised credit card rates and is charging the customer about 3-3.5% on a monthly basis. The other foreign bank, Netherlands –based ABN AMRO Bank has raised its credit card rates from 3.1% to 3.2-3.5% on monthly basis, which will be effective from June 1.

The ICICI Bank credit card customers will also be seeing rise in rates going up by 2%. As per the sources at present the bank is charging 1.51%-3.41% against a flat 2.99% earlier.

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