Bank of Baroda, a public sector bank, has raised the interest rate on loans from 0.05% to 0.20%, it said in a statement filed with the stock market. Bank of Baroda also said that the increased interest rate will be implemented immediately.
RBI has been increasing the repo rate continuously. The repo rate has been hiked to 4.40% in May, 4.90% in June and 5.40% this August. Due to this, various banks are continuously increasing the interest rate.
On August 9, HDFC raised interest rates on home loans by 0.25%. Similarly, banks including ICICI Bank, Punjab National Bank, Canara Bank, Bank of Baroda Bank, HDFC Bank have also increased the interest rate on loans.
Some banks have hiked interest rates on fixed deposits and savings accounts. A rise in interest on loans will result in higher EMIs. However, fixed deposit investors will also benefit from the rise in interest rates.