State-owned Indian Bank on Saturday said it has revised the repo linked lending rate with effect from May 9.
The bank's move comes after a number of banks raised their external benchmark based lending rates following an increase of 0.40 per cent in the repo rate -- at which the Reserve Bank lends short term money to banks.
"The Asset Liability Management Committee (ALCO) of the bank has reviewed the lending rate for all loans/advances linked with policy repo rate and revised the lending rate linked with policy repo rate based on repo from 4 per cent to 4.40 per cent," Indian Bank said 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, the bank 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 -- the short-term lending rate it charges to banks — by 0.40 per cent to 4.40 per cent with immediate effect, aimed at taming soaring inflation.