Public sector lender Bank of Baroda (BoB) and private lender Development Credit Bank Ltd (DCBL) have both raised their base rates by 50 basis points.

BoB now has a base rate of 8.5% from 8% earlier with immediate effect. DCBL has raised its base rate to 8.25% from 7.75% earlier.

"Bank of Baroda has informed BSE that the bank has decided to increase its base rate from 8 per cent to 8.5 per cent with effect from October 5," BoB said.

Banks are revising base rates following the policy rate hike by Reserve Bank of India in the second quarter review of monetary policy.

"Deposit rates and consequently cost of funds have increased, especially in the shorter tenor, necessitating an increase in the base rate," DCB Managing Director and CEO Murali M Natrajan said.

Banks like Punjab National Bank, Axis Bank, Kotak Mahindra Bank, Indian Bank, Indian Overseas Bank and others have already raised their base rates.