The Bank of India has raised its interest rate by 40 basis points

The Bank of India has raised its interest rate by 40 basis points

With effect from Monday, the repo linked lending rate of the state-owned Indian Bank has been revised from 4% to 4.40 percent. Following a 0.40 percent hike in the repo rate — the rate at which the Reserve Bank lends short-term money to banks — a number of banks upped their external benchmark based lending rates. “The bank’s Asset Liability Management Committee (ALCO) has evaluated all loans/advances linked to the policy repo rate and changed the lending rate linked to the policy repo rate based on repo from 4% to 4.40 percent,” Indian Bank stated in a regulatory filing.

The said revised lending rate of the bank shall be effective from 9th May 2022 for new customers and from 1st June 2022 for all the existing customers of the bank, it said. A number of banks including ICICI Bank, Punjab National Bank, Bank of Baroda, Central Bank of India, Bank of India, and mortgage lender HDFC Ltd have announced to raise the repo linked lending rate. Banks and financial institutions are on an interest rate hike spree following increase in repo rate and cash reserve ratio (percentage of total deposit of the banks kept with RBI) by 40 basis points and 50 basis points respectively announced by the RBI earlier this week. After an out-of-turn Monetary Policy Committee (MPC) meeting, the Reserve Bank on Wednesday hiked the benchmark repo rate by 0.40 per cent to 4.40 per cent with immediate effect, aimed at taming soaring inflation.

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