Soon after the policy rate hike by Reserve Bank of India, private sector lender, HDFC Bank has decided to raise lending rates. With this decision, it is presumable that interest rates on home, auto and other loans are soon going to see a rise.

"There will be an increase in lending rate, both in retail and corporate side. Most retail products, including auto loans, will see an increase in the next few days," HDFC Bank Executive Director Paresh Sukthankar said.

The car loan book of the bank has seen a 36% rise in the third quarter of this fiscal.

"Higher ticket loans will attract higher EMIs as lending rate increase. This will lower retail demand for higher level loans," Sukthankar said.

He also affirmed that any further rise in deposit rates is not on the cards.

"There will be no major increase in deposit rates. Even if it happens, it would be marginal," he said.

The RBI has raised repo rate as well as reverse repo rate by 25 bps each taking the figures to 6.5% and 5.5% respectively.