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rbi The Reserve Bank of India (RBI) on Tuesday hiked short-term lending and borrowing rates for the eleventh time in the last 17 months. The repo rate has been hiked by 0.50 per cent to 8 per cent and the reverse repo rate has been hiked by 0.50 per cent to 7 per cent. The CRR remained unchanged at 6 per cent. The RBI rate hike will make the loans costlier and may add to the pain of the Noida home buyers. For a Rs 20 lakh loan over 20 year tenure, EMI will rise to Rs 20,304, from Rs 19,632 currently. And for a 30 lakh loan over 20 years, EMI will now hit Rs 30,456 from Rs 29,449. Pradeep Agarwal, who took a Rs 45 lakh loan to buy a villa in Noida two years ago, pays 23,000 every month as EMI. "How will we pay if the interest rates go up? Even builders are not sure whether they can refund home buyers.


The home buyers are stuck between the agitations of farmers with the authority," Pradeep Agarwal, a home buyer said. Banks warn the jolt could come as early as next week. MD and CEO, ING Vysya Bank Shailendra Bhandari said, "I don't think this 50 basis hike is going to be something, which banks are going to retain for themselves. So rates will go up from next week or so." "We will have to look at this increase closely, it may necessitate a re-look at lending rates," Executive Director, Bank of Baroda RK Bakshi said. And this doesn't spell the end of the loan spiral. The RBI has indicated there could be more hikes to tame inflation. Economists warn the move will moderate growth - translating into lower salary hikes in 2012, possibly even job loss. (Follow IBNLive.com on Facebook and on Twitter for updates that you can share with your friends.)

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