PNB hikes interest rates on term deposits from May 7: Details here

New Delhi:With effect from June 1, the state-owned Punjab National Bank (PNB) increased the repo-linked lending rate (RLLR) for existing customers from 6.5 percent to 6.9 percent.

The amended RLLR will take effect from May 7 for new customers. With effect from tomorrow, the Bank has increased interest rates on term deposits in certain buckets by up to 60 basis points.

The RLLR increase comes after the Reserve Bank of India (RBI) unexpectedly raised key policy rates by 40 basis points (bps). In addition, the Cash Reserve Ratio (CRR) was raised by 50 basis points.

ICCI Bank and Bank of Baroda, in addition to PNB, have linked their external benchmark linked loan interest rates. In response to changes in the repo rate, the external benchmark lending rate rises or falls.

Because new loans after October 2019 are linked to the repo rate, the hike in the repo rate will raise the cost of most personal loans, vehicle loans, and house loans for borrowers.

With effect from October 1, 2019, the Reserve Bank instructed all banks to link the interest rate on all new floating rate personal or retail loans, as well as floating-rate loans to MSMEs, to an external benchmark.