Get ready to pay more: Banks hike prime lending rates

Jammu & Kashmir Bank and IDBI Bank have also raised their PLRs by 0.50 percent each.

Bank of Rajasthan said it is increasing its BPLR (benchmark prime lending rate) by 1 percent and RPLR by 0.50 percent

Bank of India (BOI) chairman and managing director T.S. Narayanasami said he expects the bank to increase its PLR by "minimum 50 basis points." This, however, would come into effect after August 30 when RBI's new rates take effect, he said.

Other banks like state-run Bank of Baroda and Dena Bank said they would take a decision on lending rates later this week.

According to Seshadri Sen, banking analyst at Macquarie in Mumbai, RBI's move "is negative for banks, especially as the hikes were above consensus expectations."

"We expect lending and deposit rates to rise further and growth to slow significantly. This will affect banks' net interest margins, loan growth and credit losses," Sen said.