Loan rates have been risen by Housing Development Finance Corporation (HDFC) and ICICI Bank. On August 22, the two major private banks announced an increase in their lending rates. HDFC has decided to raise its retail prime lending rate, on which its adjustable rate home loans are benchmarked, by 25 basis points to 16.65 per cent from August 23.    

In the backdrop of the rate hike HDFC would offer housing loans up to Rs 30 lakh at 10.40 per cent and loans above Rs 30 lakh at 10.65 per cent. HDFC is India’s largest mortgage lender.    

India's largest private sector lender, ICICI Bank has also announced a 25 basis points raise in its base rate or minimum lending rate from August 23. The private lender’s base rate would be increased to 10 per cent. The rate revision would make all loans and advances offered by the bank on floating interest rates from July 2010 expensive.    

The bank had decided to determine the interest rates on new loans and advances, including consumer loans, with reference to its base rate with effect from July 1, 2010.