The increase in the repo rate announced recently by the RBI is leading to a revision of EMIs. Increase the repo rate by 50 basis points will definitely force banks to raise the lending rates by 50-100 basis points, or 0.5-1 percentage point. The RBI policy to raise the interest rate on savings bank deposits to 4 per cent from 3.5 per cent has brought cheers to depositors. But home-loan customers will have their equated monthly instalments (EMIs) increased when the banks increase the interest rates on borrowings. Most banks are just waiting to raise the interest rate.
