Lending rates set to rise; interest rates on deposits may also move up

The days of ultra-low interest rates are over. With the monetary policy committee (MPC) raising the repo rate by 40-basis points to 4.40 per cent on Wednesday, the interest rate cycle has turned.

Consequently, lenders will revise their lending rates upwards, especially on loans, which are linked to an external benchmark.

Interest rates on deposits are also expected to move upwards, bringing some relief to the common man.

As of December 2021, a little over 39 per cent of loans by banks are linked to the external benchmark, shows Reserve Bank of India (RBI) data.

And, 53 per cent of