Banks Begin Raising Lending Rates After RBI Hikes Repo Rate By 25 Basis Points | AI Representational Image
New Delhi, Oct 7: Hours after RBI raised its benchmark policy rate, large banks such as Punjab National Bank, Indian Bank and Bank of Baroda announced an increase in their lending rates, making loans expensive for borrowers. The Reserve Bank of India raised its benchmark interest rate by 25 basis points to 5.50 per cent on Wednesday, its first increase in nearly four years, and signalled that further hikes could follow as rising inflation and a weakening currency prompt a policy pivot.The six-member Monetary Policy Committee voted unanimously to raise the repo rate, the first such increase since Governor Sanjay Malhotra took office in December 2024. While the move was widely expected, the central bank sprang a surprise in shifting its stance towards “calibrated tightening”, effectively ruling out a rate cut in the near term.PNB raises lending rate
Punjab National Bank (PNB), in a regulatory filing, said that consequent upon an increase in the repo rate by the RBI, the bank has revised Repo Linked Lending Rate (RLLR) from 8.10 per cent (including BSP of 0.35 per cent) to 8.35 per cent (including BSP of 0.35 per cent) with effect from October 8.
However, the country’s second-largest public sector lender said the Marginal Cost of Lending Rate (MCLR) and Base Rate would remain unchanged. Indian Bank revises RBLRChennai-based public sector lender Indian Bank also increased its Repo Linked Benchmark Lending Rates (RBLR) to 8.20 per cent against the existing 7.95 per cent.In line with the increase in the policy repo rate of 25 basis points by RBI’s Monetary Policy Committee (MPC), the revised rate of the bank would be effective from October 8, Indian Bank said in a separate filing.Other public sector banks followAnother large public sector lender, Bank of Baroda (BoB), increased its Repo Based Lending Rate to 8.15 per cent from the existing 7.90 per cent, an increase of 25 basis points.Bank of India (BoI) and Indian Overseas Bank (IOB) also raised their Repo Based Lending Rate (RBLR) to 8.35 per cent, effective October 8.The revision follows the RBI’s upward revision of the repo rate, BoI said in a regulatory filing.Also Watch:
Private sector lender raises rateOn the private sector side, Tamilnad Mercantile Bank increased its Repo Linked Lending Rate (RLLR) to 8.5 per cent from the existing 8.25 per cent.Other lenders are expected to announce an increase in their benchmark lending rate in line with RBI’s decision.(Except for the headline, this article has not been edited by FPJ’s editorial team and is auto-generated from an agency feed.)