Banks resume lending rate hike after 3 months

• 14 bps hike in October

- MAHESH NAYAK

AFTER A GAP of three months, banks have resumed raising interest rates on fresh loans.

The rates increased by 14 basis points in October to 8.64% from 8.50% in September. Between July and September, banks had cut interest rates on new loans by 31 bps after hiking rates in July by 19 bps from 8.62% in June.

The hike in lending rates comes against the backdrop of the Reserve Bank of India (RBI) cutting the repo rate by 50 basis points in June to 5.5%. System credit in October grew 11.1% yo-y compared with 10.2% in September.