Costlier lending likely, say banks

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Deposit rate, I think, will go up and, accordingly, lending rates can also go up, says SBI chairman Pratip Chaudhuri. Deposit rate, I think, will go up and, accordingly, lending rates can also go up, says SBI chairman Pratip Chaudhuri.
SummaryBanks could raise their lending rates following RBI's monetary policy announcement on Friday as tight liquidity could increase cost of funds

season, this might become more glaring and force banks to raise rates.

Even, lenders like Bank of India and Oriental Bank of Commerce (OBC), which had not raised their rates, might have to do so after the RBI policy decision. Bank of India had cut its base rate on July 3 by 25 bps to 10%, while OBC had rolled back its 25 bps base rate cut decision on July 19.

“For 8-10 days, you will not see any action on rates, though those that had reduced their base rates may reverse their steps,” said OBC CMD SL Bansal.

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