Banks hike lending rates ahead RBI Policy on strongest loan demand in 4 yrs

Indian lenders are raising interest rates even before any central bank action as the strongest loan demand in four years amid weak deposit growth pressures funding costs.

State Bank of India, ICICI Bank Ltd and Punjab National Bank are among the nation’s biggest banks that increased their benchmark lending rates last week. The Reserve Bank of India, on the other hand, is expected to keep its key rate unchanged for a fifth straight meeting when it decides on policy Wednesday.

Higher borrowing costs risk slowing the recent recovery in demand for credit, which was led by retail and working capital loans, said