This comes just a day after the Reserve Bank of India (RBI) hiked policy repo rate by 50 bps to tame inflation. Friday's hike takes the repo rate above pre-pandemic levels of 5.15 per cent. The RBI has so far hiked the key repo rate by 140 basis points in three instances.
Repo rate is the rate at which the central bank of a country lends money to commercial banks.
As per data updated on Canara Bank website, the interest rate on home loans will be increased to 8.10 per cent for general customers.
For women customers, it will be hiked to 8.05 per cent. Canara Bank offers 0.05 per cent concession to women borrowers.
ICICI Bank and PNB too raised their lending rates after the RBI increased the benchmark interest rate.
ICICI Bank External Benchmark Lending Rate (I-EBLR) is referenced to RBI policy repo rate with a mark-up over repo rate, ICICI Bank said in a notification.
"I-EBLR is 9.10 per cent p.a.p.m. (per annum payable monthly) effective August 5, 2022," the private sector lender added.
State-owned Punjab National Bank (PNB) also raised the repo, the external benchmark, linked lending rate to 7.90 per cent.
"Consequent upon an increase in repo rate by RBI, the Repo Linked Lending Rate (RLLR) has been revised from 7.40 per cent to 7.90 per cent with effect from August 8, 2022," PNB said in a regulatory filing.
As per the RBI directions, the interest rate under the external benchmark is supposed to be reset at least once in three months.
