Corporation Bank hikes base rate by 50 basis points

MUMBAI - Corporation Bank said Thursday it will hike base rate, the minimum rate below which a bank cannot offer loan, by 50 basis points to 8.25 percent from Nov 8, making all loans, including auto and housing loans, dearer.

In a regulatory filing to the Bombay Stock Exchange, the bank said it would revise the base rate for lending from 7.75 percent per annum to 8.25 percent per annum with effect from Nov 8, 2010.

Other banks are also expected to raise rates following aggressive monetary tightening by the country’s central bank.

The Reserve Bank of India (RBI) has tweaked interest rates for the sixth time this year to tame inflation.

In its second-quarter review of monetary policy Tuesday, the RBI hiked repurchase rate from 6 percent to 6.25 and reverse repurchase rate from 5 percent to 5.25 percent.