The sudden unexpected rate hike by regulator Reserve Bank of India has come as a 'shocker' for the economy. With policy rates getting raised by as much as 50 bps by the apex bank, retail loans are also bound to get costlier by atleast the same percentage.

"The hike is more than expected and it will push interest rates (lending and deposits) by up to 50 basis points," the Oriental Bank of Commerce Executive Director, Mr S.C. Sinha said.

The repo rate now stands at 8% while reverse repo rate stands at 7%.

Private sector lender Yes Bank has soon after responded by raising its lending rates by the same amount.