Two of the largest private banks, HDFC and ICICI, hiked interest rates from August 1.

The rate of interest for fixed deposits has been increased by 75 to 100 basis points. Floating reference rates (FRR) for consumer’s loans were also hiked by 75 basis points. The new FCC will be 14.25 percent. ICICI has stated in a press release that existing customers will not be covered under new interest rates.

The decision of interest hike has come after Reserve Bank of India increased cash reserve ratio and Rapo rates to curb the demand of money from the market. RBI is taking various steps to tame ever-growing rate of inflation.

HDFC has increased its Retail Prime Lending Rate (RPLR) by 75 points and new rates will come in to effect by today. Both new and old customers will be affected by new interest rates.

Public sector lender Punjab National Bank has also increased interest rates the fixed rates will be 14 per cent per annum. Axis bank hiked its PLR by 50 basis points to 15.75 per cent. The home loan will become more costly following this hike in prime interest rates by almost all public and private banks.