What is in store for home-loan customers? Will it be harder to get a loan following the new anti-inflationary monetary policy of the Reserve Bank of India (RBI)? Do existing borrowers face tough times ahead?

Bankers says the May 3 decision of the RBI to increase the repo rate by 50 basis points will definitely force banks to raise the lending rates by 50-100 basis points, or 0.5-1 percentage point. The repo rate (the rate at which the RBI lends short-term money to commercial banks) has been revised to 7.25 per cent, up from the previous 6.5 per cent.

However, the interest banks earn on parking surplus liquidity with the RBI has gone up to 6.25 per cent from 5.75 per cent. The RBI policy to raise the rate on bank deposits to 4 per cent from 3.5 per cent has brought cheers to depositors.