M A I N   N E W S

Your EMI may just go up
Home, auto, personal loans may rise after RBI adjusts repo rates
Sanjeev Sharma
Tribune News Service

BALANCING ACT Repo rate is the rate at which RBI lends to banks now 6.25% Reverse repo is the rate at which RBI borrows from banks now 5.25% Banks will most likely hike the deposit rates before they take a call on the lending rates linked to base rate. Draft guidelines for licensing of new banks to be out by the end of January 2011

New Delhi, November 2
Home, auto and personal loans are likely to get more expensive for consumers while they will get higher deposit rates in banks as the Reserve Bank of India (RBI) hiked benchmark short term borrowing and lending rates for the sixth time this year as part of its anti-inflationary thrust but signaled it may not raise rates further.

The RBI hiked repo and reverse repo rates by 25 basis points (100 basis points equals 1 per cent) reflecting the continued government and central bank concerns over inflationary pressures. This led industry body FICCI to express concern over the RBI move which it feels will suppress consumer demand and growth in the economy. CII said that this may not lead to banks raising rates immediately. Chanda Kochhar, managing director & CEO, ICICI Bank said RBI has assured that it will monitor the liquidity situation closely to avoid choking off fund flows required for growth.