Banks Raise Lending Rates After RBI Hikes Repo Rate

Hours after the RBI raised the repo rate by 25 basis points to 5.50%, major Indian banks including PNB, Indian Bank, and Bank of Baroda increased their benchmark lending rates, effective October 8. The move makes loans costlier for borrowers. The RBI's first rate hike in nearly four years signals a shift to calibrated tightening to combat inflation and support the currency.