In its second bi-monthly monetary policy of the current financial year, the Reserve Bank of India (RBI) on Wednesday hiked the repo rate, or the rate at which it lends money to commercial banks, by 0.25 per cent to 6.25 per cent, after a gap of about four-and-a-half years.
BoI has increased its one-year MCLR to 8.50 per cent from 8.40 per cent, the bank said in a statement today.
The one-month and three-month MCLR have been revised to 8.20 per cent and 8.30 per cent, respectively.
New lending rates will be effective from June 10, the bank said.
After RBI's rate hike, while many banks have already increased lending rates, others are likely to follow suit.
Yesterday, Indian Bank and Karur Vysya Bank increased lending rates by up to 10 basis points for different tenures.
Earlier this month, country's largest lender State Bank of India had raised lending rates by 10 basis points in anticipation of an RBI rate hike. Its one year MCLR rates stands at 8.25 per cent.
Other private sector lenders ICICI Bank and HDFC Bank have also increased their lending rates.