A recent press report said that ICICI, union bank of India, Indian overseas bank, United Bank of India, Andhra Bank and State bank of Bikaner and Jaipur raised their lending rates by 59 basis points making auto, home and other loan expensive.
The report also said that the decision of the banks to raise the interest rates comes within days of the Reserve Bank increasing short term lending and borrowing rates by 50 bps, with an aim to calm down inflation, which has hovered above the government’s comfort level.
Further the report also said that several other banks including Punjab National Bank, Canara Bank, Bank of Baroda and Indian Bank have already increased their interest rates.
The report said that the banks have been on a rate hike spree since the Reserve Bank’s decision to raise short-term key rates including the repo and reverse repo by 50 basis points in its annual credit policy on May 3. The repo rate and reverse repo rate now stand at 7.25 and 6.25 basis points, respectively.
The report finally said that the banking regulator also upped the savings bank deposit interest rate to 4 per cent from 3.5 per cent.