A recent press report said that the recent policy rate hike by regulator Reserve Bank of India will lead to rush in loan rates by various lenders.
Reports said that major lenders like Punjab National Bank, Bank of Baroda (BOB), IDBI Bank and Oriental Bank of Commerce (OBC) have already raised their base rate to 10.75%. The hike in base rate as well as BPLR is an indicative that retail loans like car loans, home loans, personal loans etc are set to get dearer.
Reports also said that the increase in cost of deposits have started to casting pressure on net interest margins of banks are leading them to increase their loan rates. PNB’s base rate stands at 10.75%, a hike by 75 bps. OBC and BoB have announced a 50 bps hike in the same.
The hike in base rates denotes that new customers taking housing and car loan will have to pay higher rate of interest. The continuous hike has made the new borrowers hesitate to take up loans.