Pressure building on banks to raise lending rates, albeit gradually

Real action only after policy rate revision

Taking a cue from the shift in policy stance and hardening yields, banks may look to revise (read hike) lending rates albeit in a calibrated manner. Much of upward revision in loan rates is expected to happen when the Reserve Bank of India hikes policy rates like repo, bankers said.

Bank executives credit offtake has been subdued said in the first quarter, especially in the wholesale segment. Small ticket loans – retail and MSMEs – are benchmarked to external parameters like repo rate. So little action is expected in the near term.

The Indian Bank Association chairman and Punjab National