Indian lenders have begun passing on the Reserve Bank of India's first rate hike in nearly four years to borrowers, with at least seven banks raising their repo-linked lending rates by 25 basis points within hours of the central bank's decision. The move is set to make home, auto and other floating-rate loans costlier for customers linked to external benchmark rates.
Who has raised rates
Bank of Baroda has raised its repo-based lending rate from 7.90 per cent to 8.15 per cent, effective October 8. Bank of India increased its repo-based lending rate from 8.10 per cent to 8.35 per cent, effective October 7.
Indian Bank raised its repo-linked benchmark rate from 7.95 per cent to 8.20 per cent, while Indian Overseas Bank moved its rate from 8.10 per cent to 8.35 per cent, both effective October 8. Karur Vysya Bank raised its rate from 8.55 per cent to 8.80 per cent, and Tamilnad Mercantile Bank from 8.25 per cent to 8.50 per cent.
Punjab National Bank revised its repo-linked lending rate from 8.10 per cent to 8.35 per cent in a regulatory filing, though it kept its MCLR and base rate unchanged. Analysts expect more lenders to follow with similar revisions in the coming days.
Separately, Bajaj Finance raised interest rates on fixed deposits by 15-40 basis points across tenures of 12 to 60 months, effective October 7, with regular depositors set to earn up to 7.75 per cent a year on 31-60 month deposits.
Why the RBI moved
The RBI's six-member Monetary Policy Committee unanimously voted on October 7 to raise the benchmark repo rate to 5.50 per cent from 5.25 per cent, and shifted its policy stance to 'calibrated tightening', signalling that rate cuts are effectively off the table in the near term.
Governor Sanjay Malhotra highlighted the re-escalation of the West Asia conflict, which pushed the average Indian crude oil basket price to $116.1 per barrel in September from $82 in July. CPI inflation rose to 4.8 per cent in August from 4.5 per cent in July, driven by food and fuel prices, and the RBI now projects full-year inflation of 5.2 per cent for 2026-27. The bank has also raised its full-year GDP growth forecast to 7.1 per cent after the economy grew 7.8 per cent in the first quarter.
Sources: More banks raise loan rates as RBI repo hike filters through - CNBC TV18, Loans get costlier: PNB, BOB others hike rates after RBI's 25 bps repo rate hike - Business Today
Who has raised rates
Bank of Baroda has raised its repo-based lending rate from 7.90 per cent to 8.15 per cent, effective October 8. Bank of India increased its repo-based lending rate from 8.10 per cent to 8.35 per cent, effective October 7.
Indian Bank raised its repo-linked benchmark rate from 7.95 per cent to 8.20 per cent, while Indian Overseas Bank moved its rate from 8.10 per cent to 8.35 per cent, both effective October 8. Karur Vysya Bank raised its rate from 8.55 per cent to 8.80 per cent, and Tamilnad Mercantile Bank from 8.25 per cent to 8.50 per cent.
Punjab National Bank revised its repo-linked lending rate from 8.10 per cent to 8.35 per cent in a regulatory filing, though it kept its MCLR and base rate unchanged. Analysts expect more lenders to follow with similar revisions in the coming days.
Separately, Bajaj Finance raised interest rates on fixed deposits by 15-40 basis points across tenures of 12 to 60 months, effective October 7, with regular depositors set to earn up to 7.75 per cent a year on 31-60 month deposits.
Why the RBI moved
The RBI's six-member Monetary Policy Committee unanimously voted on October 7 to raise the benchmark repo rate to 5.50 per cent from 5.25 per cent, and shifted its policy stance to 'calibrated tightening', signalling that rate cuts are effectively off the table in the near term.
Governor Sanjay Malhotra highlighted the re-escalation of the West Asia conflict, which pushed the average Indian crude oil basket price to $116.1 per barrel in September from $82 in July. CPI inflation rose to 4.8 per cent in August from 4.5 per cent in July, driven by food and fuel prices, and the RBI now projects full-year inflation of 5.2 per cent for 2026-27. The bank has also raised its full-year GDP growth forecast to 7.1 per cent after the economy grew 7.8 per cent in the first quarter.
Sources: More banks raise loan rates as RBI repo hike filters through - CNBC TV18, Loans get costlier: PNB, BOB others hike rates after RBI's 25 bps repo rate hike - Business Today
