Bank of Baroda, Punjab National Bank and Indian Bank were among lenders that raised repo-linked lending rates by 25 basis points after the Reserve Bank of India lifted the repo rate to 5.50 percent.
Several Indian state-owned banks raised repo-linked lending rates by 25 basis points on Thursday after the Reserve Bank of India increased its policy rate, Business Standard reported. The paper named Bank of Baroda, Punjab National Bank and Indian Bank among the lenders.
The RBI's monetary policy committee raised the repo rate by 25 basis points to 5.50 percent at its meeting that ended on 7 October and signalled a tighter stance. The Thursday moves pass that increase into new lending linked to the repo rate. Existing fixed-rate loans are not automatically repriced.
The RBI's press page for 8 October listed routine liquidity operations, including results of variable-rate reverse-repo auctions, rather than a fresh rate decision. Business Standard also reported that banks parked 79,655 crore rupees at a 29-day reverse-repo auction against 2 trillion rupees offered, and that the 10-year benchmark yield rose to 7.29 percent.
Higher lending rates raise the cost of new floating-rate credit for households and firms. The paper did not publish a full list of every bank that had moved by Thursday night.
The rate pass-through is a bank decision after the Wednesday policy step. It is not a second RBI hike.