Stories
PNB and Bank of Baroda hike lending rates following RBI repo rate increase
- •The Reserve Bank of India hiked the repo rate by 0.25 percent to 5.50 percent.
- •Major banks including Punjab National Bank, Bank of Baroda, and Indian Bank increased their lending rates by 0.25 percent.
- •The new interest rates have come into effect from October 8, impacting borrowers with floating-rate loans.
- •Borrowers may see an increase in their monthly installments (EMIs) or have their loan tenures extended.
- •The rate hike was implemented to control rising inflation and stabilize the falling value of the rupee.
Key Questions Answered
The Reserve Bank of India hiked the repo rate by 0.25 percent to reach 5.50 percent, marking the first rate hike in about four years. The central bank implemented this measure to control rising inflation and address the continuous fall in the value of the rupee.
Major institutions including Punjab National Bank (PNB), Indian Bank, Bank of Baroda, Bank of India, and Indian Overseas Bank have raised their repo rate-linked lending rates by 0.25 percent. For instance, PNB increased its Repo Linked Lending Rate from 8.10 percent to 8.35 percent, with the new rates taking effect on October 8.
Borrowers with floating-rate loans, such as home, car, and personal loans, may experience an increase in their monthly installments (EMIs) or have their loan tenures extended. The exact additional cost depends on factors like the loan type, amount, tenure, and individual lender terms.
