A recent press report said that the Retail and corporate credit, including home and auto loans, are likely to become costlier due to the RBI’s latest increase in the key rate.
Mr. S. C Sinha, Executive Director, Oriental Bank of Commerce said that banks might increase both lending and deposit rates following the RBI action. He said that there can be a minimum 0.25 per cent hike in lending rates. He also said that banks have not hiked rates following the September review of credit policy.
Reports said that the Reserve Bank of India (RBI) has raised the repo rate by 25 basis points to 8.50 per cent and reverse repo will move up by a similar percentage to 7.50 per cent. It is the 13th such hike since March 2010.
Mr. R. K. Bansal, Executive Director of IDBI Bank said that lending rates are likely to go up due to RBI’s hike in policy rate and deregulation of deposit rate on savings bank accounts. He said that cost of funds will go up for banks and banks will in turn pass it on to the customers.