Like everything else, even a bank loan will cost you more. The irony here is that the reason is inflation itself.
After the Reserve Bank of India hiked the short-term policy rate in July to tame inflation , over a dozen banks raised lending rates. These include Punjab National Bank, Bank of Baroda and Oriental Bank of Commerce.
The latest to join the list are the country's top two banks- State Bank of India (SBI) and ICICI Bank. They recently announced a 0.50 percentage point increase in their benchmark prime lending rate (BPLR), the rate at which banks lend to their top-rated customers.
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For SBI, the BPLR would now be 14.75%, while for ICICI Bank, it would be 18.75%. ICICI Banks floating reference rate for consumer loans was also raised by 0.50 percentage points to 15.75%.
The only good news is that SBI also raised the interest rates on domestic term deposits of 180-240 days maturity by 0.50 percentage points to 7%.