As was being speculated since Tuesday, banks have decided to hike their lending and deposit rates. Among the first banks to decide on the increase, the country’s largest lender, State Bank of India (SBI), and Union Bank are the prominent ones. They along with several other PSU banks have decided to raise lending rates by 50 basis points(0.50%). This news follows the hike in repo rate and cash reserve ratio, announced by the RBI on Tuesday.

This hike will come as bad news for consumers, as it would increase all kinds of loan amounts, from housing, to auto, and from consumer to corporate.

Interestingly, SBI had refrained from hiking their PLR last time when the central bank had hiked the repo rate on June 11. However, the newest move of the RBI has increased its prime lending rate (PLR) to 12.75%, effective from Friday. But, SBI has decided no to increase their deposit rates, as it was revised last month. “But we don’t have a closed mind. If the need arises, we may revise rates,” an SBI official said.

Union Bank of India (UBI), on the other hand, has raised its rate to 13.25%. This would be effective from July 1. The bank has also raised its deposit rates by 25-100 bps.

There are also many more of such decisions expected from various other banks. Most banks are meeting to decide on their plan of action to the RBI dual hike. While the Asset Liability Committee (ALCO) of Punjab National Bank is set to meet on Friday, the panels of Bank of India and Kotak Mahindra Bank would meet to decide the new rates, if any, on Monday.

However, not all banks are thinking of hiking their interest rates at the present moment. Canara Bank said that it would examine market conditions before taking a call on revising interest rates. Adding the bank’s liquidity position was comfortable, Canara Bank CMD MBN Rao said, “Banks should consider whether they can absorb the impact of the CRR and repo hikes instead of passing on the burden to customers.”