Personal loans are set to become costly
Personal loans are set to become costly. Many banks have hiked rates on home, auto, education and personal loans for existing borrowers by up to 75 basis points. The lenders have hiked interest rates consequent to the hike in repo and reverse repo rates by the Reserve Bank of India (RBI).
The RBI, in its monetary review on July 27, raised the short-term borrowing (reverse repo) rate by 50 basis points and lending (repo) rate by 25 basis points. It, however, kept the cash reserve ratio, the portion of deposits banks are required to park with the central bank in cash, unchanged, due to the difficult liquidity position in the markets.