Bank loans to be expensive due to hike in policy interest rates

New Delhi : The next meeting of the Monetary Policy Committee of the Reserve Bank of India (RBI) is scheduled to begin on Wednesday.

loans
Bank loans

This meeting will continue till August 5, the last business day of this week. After the meeting, the RBI will announce its monetary policy on Friday. The decision to increase the repo rate can be taken once again at the meeting of the Monetary Policy Committee. If this happens, then all the loans from banks will also become expensive due to the increased EMI of loan instruments like home and car loans.

It is expected that the Monetary Policy Committee may announce an increase in policy interest rates, especially the repo rate, by 25 to 50 basis points. If this occurs, the repo rate may rise by 0.25 to 0.50 percent. After the last hike in policy rates, the repo rate is currently at 4.90 percent, which is expected to increase to 5.15 to 5.4 percent this time.

Experts say that controlling inflation is currently the biggest priority of the RBI. For this reason, it is considered fixed to increase the interest rates on August 5. It is being said that at the next meeting of the Monetary Policy Committee to be held in October, a decision can be taken to increase the interest rates once again so that inflation can be controlled.

The RBI has increased the repo rate twice this year. First, in the month of May, the repo rate was increased by 0.4 percent, while the next month, the RBI again increased the repo rate by 0.50 percent. As a result of this, the repo rate has risen to 4.90 percent.