State-owned Bank of Maharashtra (BoM) today increased its lending rates by up to 25 basis points (bps), making all kinds of loans expensive.
The bank raised base rate or the minimum lending rate by 20 bps to 10.70% from existing 10.50%, BoM said in a filing to the Bombay Stock Exchange (BSE).
At the same time, the benchmark prime lending rate of the bank has also been raised by 25 bps to 15% from 14.75%, it said.
The new rates will be effective from October 1, it said.
It is expected that other banks would follow suit since the Reserve Bank of India (RBI) on September 16 raised policy rate by 25 bps. The RBI has raised repo and reverse repo rates 12 times in last 18 months in order to contain inflation which is hovering around 10%.
As a result of these rate hikes, banks have increased their key lending rates in order to pass on the increased borrowing costs to end-users.
Following mid-quarterly policy review, State Bank of Travancore (SBT) and Dhanalaxmi Bank increased their base rates by 25 bps and 50 bps, respectively.
