Banks have started hiking interest rates again following the recent Reserve Bank decision to hike key short-term rates by 25 basis points. After Canara Bank, Dena Bank, Indian Overseas Bank, ICICI Bank hiked its lending rates on Friday, making home, auto and personal loans costlier for customers.

ICICI Bank, India’s second largest bank, has announced an increase of 0.25 per cent in the Base Rate with effect from July 4. The revised rate will be 9.50 per cent as against 9.25 per cent earlier. With effect from July 1, 2010, interest rates on new loans and advances, including consumer loans, are determined with reference to I-Base.

ICICI Bank has also announced an increase of 0.25 per cent in its benchmark prime lending rate and in its Floating Reference Rate (FRR) for consumer loans (including home loans) with effect from July 4, 2011. The above benchmark rates are used for determining interest rates on loans and advances sanctioned up to June 30, 2010. ICICI’s customers will have to shell out more as interest rates on their home and auto loans following the bank’s latest rate hike. (Indian Express)