Home, auto and corporate loans are likely to become expensive.Already banks don’t provide loans easily to the service class people. People working in Media are facing huge problem while applying for loan. It is very tough for Media people to get loan for home.
From October 1, following RBI’s move to increase the repo rate — the rate at which banks borrow short-term funds from the central bank — by 25 basis points to 6% on Thursday. The expected spike in rates will affect both existing and new borrowers.
In the last two-and-half months, RBI has increased the repo rate by 100 basis points. As banks are facing tightening in the liquidity condition and most of them are borrowing short-term funds from RBI, repo rate becomes a kind of benchmark. On Thursday, banks have borrowed Rs 51,850 crore from RBI under liquidity adjustment facility.