With the wholesale price index (WPI)-based inflation rising and there is no end to uncertainties, banks across the spectrum are set to increase lending rates. The increase on loan rates will be up to 50 basis point (half a percentage point) for the short term and one percentage point for the medium tenure.
The banks are, however, not changing their prime lending rates (PLRs) and the hike rates are being down through widening the spread below PLR.
This is the first instance since August 2000) that the lending rates are being increased. On the liabilities side, Bank of Baroda has already increased its deposits rates by 50 basis points on some slabs.
