Personal Finance
Mumbai - Close on the heels of India's central bank's move of hiking interest rates, many public and private sector banks have raised benchmark lending rate which would make corporate, home, personal and auto loan costlier, slowing down credit demand.
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It may be recalled that on Tuesday, the Reserve Bank of India (RBI) hiked the repo rate, or the key lending rate at which the central bank lends funds to commercial banks, from 8.5 percent to 9 percent, and the cash reserve ratio (CRR) or the proportion of reserves the commercial banks must keep with the central bank, from 8.75 percent to 9 percent to tame inflation.
Though RBI acted with an aim to moderate inflationary pressures, yet, the move is going to hit hard India's economic growth as with banks increasing their prime lending rates (PLRs), credit demand would fall, leading to decline in demand and business investments.
Already, India's two largest private banks, ICICI Bank and HDFC Bank have hiked their PLRs by 75 basis points or 0.75 percent.
India's largest mortgage lender Housing Development Finance Corporation (HDFC) also said it has raised its retail prime lending rates (RPLR) by 75 basis points or 0.75 percent. The increase will take effect from August 1 and its floating home loan rates will carry a minimum rate of 11.75 percent.
Axis Bank and Yes Bank have hiked their PLRs by 0.50 percent each while state-run Punjab National Bank increased its PLR by 1 percent.
Don't expect the expected from Dibakar Banerjee.
A top Indian policy adviser on Wednesday said the Reserve Bank of India (RBI) sh...
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